Yeung, D K L and Skitmore, M (2005) Data pooling for early-stage price forecasts. In: Khosrowshahi, F (ed.) Proceedings of 21st Annual ARCOM Conference, 7-9 September 2005, London, UK.
Abstract
Many clients or building owners rely heavily on the early stage construction cost forecasts, provided by the Quantity Surveyor (Q.S.), for their investment decisions and advance financial arrangements. During the preliminary stage, the information concerning the new project is very scarce. It is very common in practice for Q.S. to use historical building cost data on which to base the forecast of the new project - typically basing the forecast on the known price of the most similar project to the new one. However, this approach not always generates the most accurate results. This paper develops an idea for early stage forecasting by using out-of-sample mean square errors to measure the forecasting accuracy. A method is presented for finding the best pooling arrangement of the available data source according to the characteristics of the new project. By making the best use of the available data pool, it can maximize the quality of the early stage cost forecast with limited project information.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | data group pooling; forecasting accuracy; homogeneity; mean square error; price family |
| Index terms: | quantity surveying, forecasting, owner, construction cost, accuracy, cost data, mean square error, investment decision, historical building |
| Subjects: | prediction and forecasting, economic analysis, financial and cost management, construction type, profession, sociology, probability and distributions, professional development, accounting and finance |
| Topics: | Construction Technology, Roles and Professions, Stakeholder Management, Research Practice, Information Management, Cost Management, Business Strategy |
| Descriptive scope: | 3 PCA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here