Duncan, K; Philips, P and Prus, M (2009) The effects of prevailing wage regulations on construction efficiency in British columbia. International Journal of Construction Education and Research, 5(2), pp. 63-78. ISSN 1557-8771
Abstract
This study examines the effect of prevailing wage legislation on the efficiency of school construction. Specifically, stochastic frontier regression and British Columbian construction data are used to measure the effect of the introduction and expansion of prevailing wage requirements on technical efficiency, or the ability of builders to obtain maximum output from available resources. Results indicate that average technical efficiency for all construction projects in the sample is 94.6%. Average efficiency for projects covered by the introductory stage of British Columbia's construction wage legislation is 86.6%. By the time of the expansion of the wage policy 17 months later, the average efficiency of covered projects increased to 99.8%. These findings suggest that the introduction of prevailing wage laws disrupted construction efficiency. However, in a relatively short period, the construction industry adjusted to wage requirements by increasing overall efficiency. A short-term decrease in construction efficiency, followed by a sharp and durable increase, supports that view that prevailing wage laws are not associated with higher, long-term construction costs.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | construction efficiency; prevailing wage laws |
| Index terms: | legislation, builder, construction project, regulation, educational building construction, efficiency, construction cost, construction industry |
| Subjects: | financial and cost management, political science, industry analysis, performance management, legal systems, practitioner, building construction, production management |
| Topics: | Project Management, Quality Management, Legal Issues, Governance, Roles and Professions, Research Practice, Cost Management, Design Practice |
| Descriptive scope: | 3 PCT |
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