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Morgan State Univ.
HOMEPAGE |
The World Bank Group under its
International Comparison Program (ICP)
conducts an international survey to determine what is termed as the
purchasing power parities (PPPs) index for various sectors of the
economy. Unfortunately, there is no such index for the field of
construction. A PPP is defined as the number of units of a country’s
currency required to purchase the same amount of goods and services in
that country as compared with another. Apparently, one can assume if
the cost in US currency is divided by the exchange rate between the US
and another country, the end result will be the cost in the other
country. To make that assumption, one also has to assume that the
exchange rate for the currency between the two countries makes up for
any price differences. However the price difference are not made up in
the exchange rate. Therefore, the ICP requires a methodology for
computing purchasing power parity indexes (PPPs) in the field of
construction, along with methodologies for comparing prices
internationally in other fields.
The
goal of this research is to carefully study methods used for the
comparison of construction costs within the context of the ICP
program. This research will provide a much needed methodological study
to deal with the following broad questions: What is the cost, in local
currency units of each country, of constructing each of several
different types of construction projects? Further, how can quality and
level-of-service differences among countries be incorporated in these
comparisons? The research team will consider the current construction
cost workbook based method along with other state-of-the-art methods
used for the development of PPP indices for construction.
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