Two ENR cost indexes react differently to labour conditions

ABSTRACT

Building Cost Index (BCI), unlike Construction Cost Index (CCI), had not been thoroughly explored in the existing body of literature. Both BCI and the CCI are two similar time series, with the only difference lying in the labour components used in their calculations. This study utilizes impulse-response functions to observe the different reactions of the BCI and CCI concerning labour conditions. The results indicate that the BCI consistently displays heightened sensitivity to fluctuations in labour supply and unemployment, whereas the CCI remains insensitive to such labour-related fluctuations.

KEYWORDS:

• Building cost index
• construction cost index
• time series analysis
• labor supply
• unemployment

JEL CLASSIFICATION:

• L74
• R00

Acknowledgements

The authors would like to thank Mr. Shuai Xu, of University of Southern California, for his generous support during the revision phase.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

All data and code involved will be available upon reasonable request with the first author.