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Article: Forecasting construction tender price index inm Hong Kong using vector error correction model

TitleForecasting construction tender price index inm Hong Kong using vector error correction model
Authors
KeywordsCost estimate
Econometric modelling
Forecast
Tender price index
Vector error correction model
Issue Date2010
PublisherRoutledge. The Journal's web site is located at http://www.tandf.co.uk/journals/titles/01446193.asp
Citation
Construction Management And Economics, 2010, v. 28 n. 12, p. 1255-1268 How to Cite?
AbstractReliable short- to medium-term prediction of the tender price index (TPI) is crucial to construction stakeholders, and this has stimulated the interest of the research community to seek a more analytical method for TPI forecast. The purpose of this study is to establish an econometric model for accurately predicting the tender price movements based on a group of associated financial and macroeconomic variables. Applying Johansen's method for multivariate cointegration analysis, the tender price was found to be cointegrated with the gross domestic product, construction output and building cost. A vector error correction (VEC) model imposing the cointegration restriction was then developed for the purpose of forecasting. The model was verified against various diagnostic statistical criteria and compared with the Box-Jenkins and regression models. With a mean absolute percentage error for a three-year ahead forecast at 2.9% level, the developed VEC model outperforms the Box-Jenkins and regression models, and is proven to be efficient and reliable in forecasting the short- to medium-term tender price movements. The model can assist estimators to predict the TPI pattern in advance, and it can also help the public sector in planning for the construction workload to improve the stability of the construction market. Although the VEC model developed focuses on the Hong Kong construction market, the econometric technique can be applied to modelling other economic variables. © 2010 Taylor & Francis.
Persistent Identifierhttp://hdl.handle.net/10722/135073
ISSN
2015 SCImago Journal Rankings: 0.967
References

 

DC FieldValueLanguage
dc.contributor.authorWong, JMWen_HK
dc.contributor.authorNg, STen_HK
dc.date.accessioned2011-07-27T01:27:27Z-
dc.date.available2011-07-27T01:27:27Z-
dc.date.issued2010en_HK
dc.identifier.citationConstruction Management And Economics, 2010, v. 28 n. 12, p. 1255-1268en_HK
dc.identifier.issn0144-6193en_HK
dc.identifier.urihttp://hdl.handle.net/10722/135073-
dc.description.abstractReliable short- to medium-term prediction of the tender price index (TPI) is crucial to construction stakeholders, and this has stimulated the interest of the research community to seek a more analytical method for TPI forecast. The purpose of this study is to establish an econometric model for accurately predicting the tender price movements based on a group of associated financial and macroeconomic variables. Applying Johansen's method for multivariate cointegration analysis, the tender price was found to be cointegrated with the gross domestic product, construction output and building cost. A vector error correction (VEC) model imposing the cointegration restriction was then developed for the purpose of forecasting. The model was verified against various diagnostic statistical criteria and compared with the Box-Jenkins and regression models. With a mean absolute percentage error for a three-year ahead forecast at 2.9% level, the developed VEC model outperforms the Box-Jenkins and regression models, and is proven to be efficient and reliable in forecasting the short- to medium-term tender price movements. The model can assist estimators to predict the TPI pattern in advance, and it can also help the public sector in planning for the construction workload to improve the stability of the construction market. Although the VEC model developed focuses on the Hong Kong construction market, the econometric technique can be applied to modelling other economic variables. © 2010 Taylor & Francis.en_HK
dc.languageengen_US
dc.publisherRoutledge. The Journal's web site is located at http://www.tandf.co.uk/journals/titles/01446193.aspen_HK
dc.relation.ispartofConstruction Management and Economicsen_HK
dc.subjectCost estimateen_HK
dc.subjectEconometric modellingen_HK
dc.subjectForecasten_HK
dc.subjectTender price indexen_HK
dc.subjectVector error correction modelen_HK
dc.titleForecasting construction tender price index inm Hong Kong using vector error correction modelen_HK
dc.typeArticleen_HK
dc.identifier.openurlhttp://library.hku.hk:4550/resserv?sid=HKU:IR&issn=0144-6193&volume=28&issue=12&spage=1255&epage=1268&date=2010&atitle=Forecasting+construction+tender+price+index+using+vector+error-correction+model-
dc.identifier.emailNg, ST:tstng@hkucc.hku.hken_HK
dc.identifier.authorityNg, ST=rp00158en_HK
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1080/01446193.2010.487536en_HK
dc.identifier.scopuseid_2-s2.0-78650241304en_HK
dc.identifier.hkuros189035en_US
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-78650241304&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume28en_HK
dc.identifier.issue12en_HK
dc.identifier.spage1255en_HK
dc.identifier.epage1268en_HK
dc.publisher.placeUnited Kingdomen_HK
dc.identifier.scopusauthoridWong, JMW=30067976000en_HK
dc.identifier.scopusauthoridNg, ST=7403358853en_HK
dc.identifier.citeulike8605044-

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