Stephen Mak

A model of information management for construction using information technology

The construction industry is slow in utilising information technology (IT) to manage projects. Application of IT is piecemeal, discrete and non-systematic. Managing information for construction projects is crucial in order to make good and full use of IT in the construction industry. This paper proposes a simplified model to achieve managing information for construction by utilising the ubiquitous Internet technologies. The openness of these technologies is receiving attention of not only academics and amateurs but also of business entities and government organisations. A database-web link is required in order to properly store, organise and archive information. Internet technologies can be adapted to a corporate Intranet or business Extranet. Experiencing the advantages of Internet technologies is crucial in order to avoid negative perceptions.

Quantile Regression Estimates of Hong Kong Real Estate Prices

Linear regression is a statistical tool used to model the relation between a set of housing characteristics and real estate prices. It estimates the mean value of the response variable, given levels of the predictor variables. The quantile regression approach complements the least squares by identifying how differently real estate prices respond to a change in one unit of housing characteristic at different quantiles, rather than estimating the constant regression coefficient representing the change in the response variable produced by a one-unit change in the predictor variable associated with that coefficient. It estimates the implicit price for each characteristic across the distribution of prices and allows buyers of higher-priced properties to behave differently from buyers of lower-priced properties, even if they are within one single housing estate. Thus, it provides a better explanation of the real-world phenomenon and offers a more comprehensive picture of the relationship between housing characteristics and prices.

Risk attitude and systematic bias in estimating and forecasting

This paper describes findings from the first phase of a research project investigating the modelling of risk and uncertainty in construction estimating and forecasting. The objectives of the project are to examine current methods and, experimentally, to explore techniques which offer the potential for the production of improved information from estimates and forecasts. Some of the causes of error and bias in both traditional deterministic and in probabilistic estimating and forecasting are described. The majority of the research in cognitive psychology which has led to the common assumption of errors and biases has been carried out with lay people thinking intuitively about problems. The present research is an attempt to test these biases in a domain-specific, non-intuitive context with individuals trained in that domain. The authors hypothesize that, if professional training has any value then they should find less evidence of bias than is the case in the general literature. Empirical results are reporte...

Region-specific Estimates of the Determinants of Real Estate Investment in China

This paper utilises a reduced-form equilibrium model to investigate the possible sources of real estate investment differentials among 22 provinces, five autonomous regions and four municipalities of the People’s Republic of China. The model is estimated using panel data from 2001 to 2006, yielding a total of 186 observations. Specifically, empirical results suggest that demographic, economic and planning factors are the major determinants to cause real estate investment to vary among Chinese regions. The relatively small coefficient estimate of real interest rates indicates that it has a significant but modest impact. Based on the coefficient estimates, this paper finally suggests that the Chinese government should focus and work on several policy parameters in order to achieve a more balanced state of real estate investment across Chinese regions.

Forecasting the demand for construction skills in Hong Kong

Efficient manpower planning has been recognized as a critical aspect for the development of an economy. In 2001, the Works Bureau of the Hong Kong SAR Government (predecessor of Environment, Transport and Works Bureau) commissioned an HKPolyU consultancy team to develop a computer‐based model to estimate the demand for different categories of construction personnel. This article presents the concept and features of the manpower demand‐forecasting model developed for the construction industry of Hong Kong. The forecasting model is formulated on the basis of the labour multiplier approach by deriving the relationship between the number of workers required and the project expenditure in the given project duration. Multipliers for 61 project types were derived for 38 labour trades using completed project data. The labour demand by occupation for each project can then be estimated by multiplying the corresponding multipliers and the estimated project expenditure. Several unique features of the model have been developed, including “normalization” and “contract cost adjustment factor”. Normalizing the labour multipliers can facilitate the prediction of occupational labour requirements at different stages of a construction project. The adjustment factor is introduced to eliminate the discrepancy between the original estimates and final contract values so as to enhance the estimation accuracy. The model can also be used to predict the number of jobs created for a given level of investment. The government can apply this model to check and compare which project types will generate most jobs before committing public money. This model could be easily adopted and adapted by foreign construction authorities while planning manpower.

Housing attributes and Hong Kong real estate prices: a quantile regression analysis

By nature, people’s tastes and preferences are unique and diverse so that a constant coefficient of each housing attribute produced by ordinary least squares (OLS) is not able to fully describe the behaviour of homebuyers of different classes. To complement the least squares, quantile regression is used to identify how real estate prices respond differently to a change in one unit of housing attribute at different quantiles. Theoretically, quantile regression can be utilized to estimate the implicit price for each housing attribute across the distribution of real estate prices, allowing specific percentiles of prices to be more influenced by certain housing attributes when compared to other percentiles. Empirical results demonstrate that most housing attributes, such as apartment size, age and floor level, command different prices at different quantiles. With the use of this approach, the efficiency of the mortgage markets is enhanced by offering more accurate prediction of real estate prices at the lower and upper price distribution.

Risk analysis in cost planning and its effect on efficiency in capital cost budgeting

Builds on earlier work which reported on the experience of the Hong Kong Government in using risk analysis techniques in capital cost estimating. In 1993 the Hong Kong Government implemented a methodology for capital cost estimating using risk analysis (ERA) in its public works planning. This calculated amount replaces the pre‐1993 contingency allowance, which was merely a percentage addition on top of the base estimate of a project. Adopts a team approach to identify, classify and cost the uncertainties associated with a project. The sum of the average risk allowance for the identified risk events thus becomes the contingency. A study of the effect of ERA was carried out to compare the variability and consistency of the contingency estimates between non‐ERA and ERA projects. The preliminary results of a survey showed a highly significant difference in variation and consistency between these groups. This analysis indicates the successful use of the ERA method for public works projects to reduce unnecessary and exaggerated allowance for risk. However, the contingency allowance for ERA projects was also considered high. Adds data from the UK with descriptions of 41 private sector projects which fall into the non‐ERA category and reflect better performance in the determining of contingency allowances.

Region-Specific Estimates of the Determinants of Residential Investment

This paper adopts a reduced-form equilibrium model to investigate the possible sources of residential investment differentials among 22 provinces, five autonomous regions, and four municipalities in the People’s Republic of China. The model is estimated using panel data from 31 Chinese regions during the period between 2001 and 2006, yielding a total of 186 observations. Empirical results should hopefully shed light on the adjustment mechanism of the Chinese residential-property market. Specifically, this paper suggests that change in population, income, and business confidence are the major determinants that cause residential investment to vary among different regions. The relatively small coefficients of real interest rates and planning regulations suggest that they have significant but modest impacts on residential investment.