A critique of the methodology of building economics: trust the theories

Abstract

Ive’s most important contribution to good research was his promotion of existing theories and in particular, the use of the firm rather than the project, as the primary analytical unit. It is suggested that the current standard of research in building economics is poor, and that the failure to use existing theories shares a considerable responsibility for this problem. The predominance of poorly conceived and executed research has put us into a position where the conclusions of 80% of published research papers across the social sciences (which includes building economics) should probably be reversed because of poor methodology, research design and analysis. Peer review, rather than being one of the cornerstones of self-correcting science, is particularly problematic in building economics as it serves to isolate us from external monitoring. Replication, the second cornerstone of good science, has more or less disappeared from our journals as it’s not considered prestigious. The end result is that there is no real quality control at the same time as quantity has become increasingly important for resource allocations and academic positions, seriously overextending the system for publications. The only way back to good research is to stop experimenting with fashionable but unsound methodologies and return to tried and tested theories and methodologies.

Keywords:

• Building economics
• innovation
• methodology
• price determination
• research practice.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. Most common errors were incorrect use of statistical tests for comparing three or more groups for differences and incorrect presentation of p-values (Šimundić and Nikolac, 2009; see also Ioannidis, 2005; Simmons et al., 2011). Two reviewers of this paper suggested that there were differences between A, B and C ranked journals. None of the sources consulted and cited on this issue noted such differences and worked with what they referred to as ‘respected’ journals or ‘landmark’ studies which presumably are ranked at the higher end of the scale.

2. Any introductory text on economics will cover price determination and innovation.

3. For discussion of this framework and why it is considered illogical and not applicable to any known industry see for instance Runeson et al. (2006), Runeson and Skitmore (1999) or Runeson and Raftery (1998).

4. Any introductory text on economics will contain detailed discussions of these issues.

5. Some authors also allow for differences in mark-up.

6. This is discussed at length in Runeson and Skitmore (1999) or Runeson and Raftery (1998) for anyone interested in the details.

7. One of the reviewers of this paper suggested that a psychologist would have a different theory of this. In our experience, that is not likely; economic theory applies to most people and situations and few psychologists would make up their own. What the psychologist would have is a theory of how decision makers conceptualize what is happening in the market now in order to form their expectations of the future of the market and the firm within it. For a complete picture we need both and maybe several more theories, but that doesn’t make the return on investment any less important. That is the final and essential test.

8. This is illustrated by the use of patents which serve to create a monopoly for the innovator to allow him/her to recoup the costs of developing the innovation.

9. Type 1 and Type 2 errors only.