What is Construction Economics?
Construction economics investigates issues and topics associated with the construction and maintenance of the built environment by firms, industries and projects, using economic theory, concepts and analytical tools.
Construction economics is also concerned with the macroeconomic role of the construction industry and its relationship with associated manufacturing, professional services and materials industries.
Construction economics applies a broad range of approaches to economic aspects of the construction industry, firms and projects. These include industry economics, industrial organization and other management studies, financial and behavioural economics, econometric analysis and modelling, legal and institutional research, and transaction cost economics.
Topics of interest in construction economics include the roles of participants and processes, productivity and value for money, environmental performance and sustainability, the delivery process and procurement, the financing, viability and competitiveness of construction firms and projects, technological and institutional development, construction statistics and measurement, international construction, regulation, and government policies affecting the industry.
Some of the earliest construction economics publications were on developing economies, bidding strategy, input-output data, building cycles, multinational firms, market structure, firm performance, size and scope, and the role of construction in long run economic growth. Newer fields were organizational behaviour, transaction costs, decision making under risk and uncertainty, R&D and innovation. Recent work has been on issues around construction statistics and data and the measurement and performance of the construction industry and construction projects.
Over the last five decades, contributions to construction economics have come from diverse viewpoints and places. There have been contributions from economists like Patricia Hillebrandt, Paul Strassman, Graham Ive, Stephen Gruneberg, Martin Skitmore and Goran Runeson, but also from architects, quantity surveyors, sociologists and engineers like Ducio Turin, Ranko Bon, George Ofori, Jim Meikle, Graham Winch, David Gann and Lauri Koskela. Construction economics is multi-disciplinary and uses multiple models to disentangle and analyse issues associated with the construction industry in particular and the construction of the built environment more broadly.