IDEAS home Printed from https://ideas.repec.org/a/taf/conmgt/v23y2005i3p295-304.html
   My bibliography  Save this article

Project cost estimation using principal component regression

Author

Listed:
  • Swee Lean Chan
  • Moonseo Park

Abstract

Factors affecting construction project cost include project-specific factors and those reflecting the characteristics of the project team. Multiple regression is often used to estimate a project's cost, but independent variables with a high degree of correlation are likely be left out of such a model. As a result, only a limited number of factors are included in the estimate of project cost and predictions from such models will not be accurate. To overcome this technical inefficiency, the aims of this study are: to identify factors that contribute to project cost, to construct a predictive project cost model using the principal component technique and to assess the relative importance of determining factors. The data are obtained from a random sample survey comprised of Singapore building projects completed after 1992 costing more than US$5 million in value. Three main groups of variables are identified, pertaining to characteristics of the project, contractors and owner/consultants. Special project requirements such as high technological level; contractor's specialized skills; and public administered contract have significant effects on cost. Other factors include contractor's technical expertise; owner's level of construction sophistication and contractor's financial management ability. The model assesses the impact of individual factors on project cost and provides a decision support tool to estimate cost more accurately.

Suggested Citation

  • Swee Lean Chan & Moonseo Park, 2005. "Project cost estimation using principal component regression," Construction Management and Economics, Taylor & Francis Journals, vol. 23(3), pages 295-304.
    • Handle: RePEc:taf:conmgt:v:23:y:2005:i:3:p:295-304
    DOI: 10.1080/01446190500039812
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/01446190500039812
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/01446190500039812?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Peter Kaming & Paul Olomolaiye & Gary Holt & Frank Harris, 1997. "Factors influencing construction time and cost overruns on high-rise projects in Indonesia," Construction Management and Economics, Taylor & Francis Journals, vol. 15(1), pages 83-94.
    2. Akintola Akintoye, 2000. "Analysis of factors influencing project cost estimating practice," Construction Management and Economics, Taylor & Francis Journals, vol. 18(1), pages 77-89.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Moschouli, Eleni & Soecipto, Raden Murwantara & Vanelslander, Thierry, 2019. "Cost performance of transport infrastructure projects before and after the global financial crisis (GFC): Are differences observed in the conditions of project performance?," Research in Transportation Economics, Elsevier, vol. 75(C), pages 21-35.
    2. Nyoni, Thabani, 2019. "Cost overrun factors in construction industry: a case of Zimbabwe," MPRA Paper 96788, University Library of Munich, Germany.
    3. Yu Yu & Nita Umashankar & Vithala R. Rao, 2016. "Choosing the right target: Relative preferences for resource similarity and complementarity in acquisition choice," Strategic Management Journal, Wiley Blackwell, vol. 37(8), pages 1808-1825, August.
    4. Swei, Omar & Gregory, Jeremy & Kirchain, Randolph, 2017. "Construction cost estimation: A parametric approach for better estimates of expected cost and variation," Transportation Research Part B: Methodological, Elsevier, vol. 101(C), pages 295-305.
    5. C.G. Hart & Z. He & R. Sbragio & N. Vlahopoulos, 2012. "An advanced cost estimation methodology for engineering systems," Systems Engineering, John Wiley & Sons, vol. 15(1), pages 28-40, March.
    6. Minhyuk Jung & Shira You & Seokho Chi & Ilhan Yu & Bon-Gang Hwang, 2018. "The Relationship between Unbilled Accounts Receivable and Financial Performance of Construction Contractors," Sustainability, MDPI, vol. 10(8), pages 1-14, July.
    7. Zhen Chen & Yaqi Zhao & Xia Zhou & Lin Zhang, 2020. "Investigating Critical Factors That Encourage Private Partners to Participate in Sports and Leisure Characteristic Town Public-Private Partnerships: Evidence from China," Sustainability, MDPI, vol. 12(8), pages 1-23, April.
    8. Yubo Guo & Igor Martek & Chuan Chen, 2019. "Policy Evolution in the Chinese PPP Market: The Shifting Strategies of Governmental Support Measures," Sustainability, MDPI, vol. 11(18), pages 1-24, September.
    9. Qiao, Yu & Fricker, Jon D. & Labi, Samuel, 2019. "Effects of bundling policy on project cost under market uncertainty: A comparison across different highway project types," Transportation Research Part A: Policy and Practice, Elsevier, vol. 130(C), pages 606-625.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nur Fatin Syazwani Abu Bakar* & Syuhaida Ismail & Rohayah Che Amat & Serdar Durdyev, 2018. "Sustainable Construction in Malaysian Mixed Development Projects: The Barriers and Critical Success Factors," The Journal of Social Sciences Research, Academic Research Publishing Group, pages 885-892:6.
    2. Basem Al Khatib & Yap Soon Poh & Ahmed El-Shafie, 2018. "Delay Factors in Reconstruction Projects: A Case Study of Mataf Expansion Project," Sustainability, MDPI, vol. 10(12), pages 1-18, December.
    3. Hyeongjun Mun & Jaewook Jeong & Jaemin Jeong, 2023. "Improving the Model for Estimating the Number of Construction Workers for Apartment Construction," Sustainability, MDPI, vol. 15(9), pages 1-17, April.
    4. Wei Wang & Shoujian Zhang & Yikun Su & Xinyang Deng, 2019. "An Empirical Analysis of the Factors Affecting the Adoption and Diffusion of GBTS in the Construction Market," Sustainability, MDPI, vol. 11(6), pages 1-24, March.
    5. Hai Pham & Soo-Yong Kim & Truong-Van Luu, 2020. "Managerial perceptions on barriers to sustainable construction in developing countries: Vietnam case," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(4), pages 2979-3003, April.
    6. Yi, Liqi & Li, Tao & Zhang, Ting, 2021. "Optimal investment selection of regional integrated energy system under multiple strategic objectives portfolio," Energy, Elsevier, vol. 218(C).
    7. Esa, Mohd Reza & Halog, Anthony & Rigamonti, Lucia, 2017. "Strategies for minimizing construction and demolition wastes in Malaysia," Resources, Conservation & Recycling, Elsevier, vol. 120(C), pages 219-229.
    8. Nyoni, Thabani, 2019. "Cost overrun factors in construction industry: a case of Zimbabwe," MPRA Paper 96788, University Library of Munich, Germany.
    9. Ting Wang & Emmanuel Kingsford Owusu & Qinghua He & Zidan Tian & Dong Wu, 2022. "Empirical Assessments of the Determinants of Construction Megaprojects’ Success: Evidence from China," Sustainability, MDPI, vol. 14(22), pages 1-20, November.
    10. Daeyoun Won & Bon‐Gang Hwang & Soo Jing Chng, 2021. "Assessing the effects of workforce diversity on project productivity performance for sustainable workplace in the construction industry," Sustainable Development, John Wiley & Sons, Ltd., vol. 29(2), pages 398-418, March.
    11. Adrian Sfichi & Eduard Zadobrischi & Narcisa Sfichi & Marian Bădeliță & Mihai Medrihan, 2022. "Utility of Sharing Economy Principles in the Development of Applications Dedicated to Construction Cost Estimation," Future Internet, MDPI, vol. 15(1), pages 1-26, December.
    12. Wu, Yunna & Zhang, Ting & Xu, Chuanbo & Zhang, Xiaoyu & Ke, Yiming & Chu, Han & Xu, Ruhang, 2019. "Location selection of seawater pumped hydro storage station in China based on multi-attribute decision making," Renewable Energy, Elsevier, vol. 139(C), pages 410-425.
    13. Bon-Gang Hwang & Ming Shan & Helena Phua & Seokho Chi, 2017. "An Exploratory Analysis of Risks in Green Residential Building Construction Projects: The Case of Singapore," Sustainability, MDPI, vol. 9(7), pages 1-21, June.
    14. Mohanad Kamil Buniya & Idris Othman & Serdar Durdyev & Riza Yosia Sunindijo & Syuhaida Ismail & Ahmed Farouk Kineber, 2021. "Safety Program Elements in the Construction Industry: The Case of Iraq," IJERPH, MDPI, vol. 18(2), pages 1-13, January.
    15. Miranda Sarmento, J.J. & Renneboog, Luc, 2017. "Cost overruns in public sector investment projects," Other publications TiSEM 51799a3e-4c78-4dbd-b330-b, Tilburg University, School of Economics and Management.
    16. Seda Tan & Gulden Gumusburun Ayalp & Muhammed Zubeyr Tel & Merve Serter & Yusuf Berkay Metinal, 2022. "Modeling the Critical Success Factors for BIM Implementation in Developing Countries: Sampling the Turkish AEC Industry," Sustainability, MDPI, vol. 14(15), pages 1-28, August.
    17. Giuliano Marella & Valentina Antoniucci, 2019. "Time Overrun in Public Works—Evidence from North-East Italy," Sustainability, MDPI, vol. 11(24), pages 1-17, December.
    18. Wajeeha Hasnain & Urooj Pasha, 2022. "Ameliorating Performance of UAE Projects by Technological Collaboration of Construction Entities," iRASD Journal of Management, International Research Alliance for Sustainable Development (iRASD), vol. 4(2), pages 263-273, june.
    19. Myung-Hun Kim & Eul-Bum Lee, 2019. "A Forecast Model for the Level of Engineering Maturity Impact on Contractor’s Procurement and Construction Costs for Offshore EPC Megaprojects," Energies, MDPI, vol. 12(12), pages 1-18, June.
    20. Goutom K. Pall & Adrian J. Bridge & Jason Gray & Martin Skitmore, 2019. "Causes of Delay in Power Transmission Projects: An Empirical Study," Energies, MDPI, vol. 13(1), pages 1-29, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:conmgt:v:23:y:2005:i:3:p:295-304. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RCME20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.