The impact of oil price regimes on construction cost in Nigeria
Article
Article Title | The impact of oil price regimes on construction cost in Nigeria |
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ERA Journal ID | 40432 |
Article Category | Article |
Authors | |
Author | Olatunji, Oluwole Alfred |
Journal Title | Construction Management and Economics |
Journal Citation | 28 (7), pp. 747-759 |
Number of Pages | 13 |
Year | 2010 |
Place of Publication | United Kingdom |
ISSN | 0144-6193 |
1466-433X | |
Digital Object Identifier (DOI) | https://doi.org/10.1080/01446191003725162 |
Web Address (URL) | https://www.tandfonline.com/doi/full/10.1080/01446191003725162 |
Abstract | Construction costs in Nigeria are often high and unpredictable. The pattern of variability is not explained by inflationary indices of common goods and services, but rather it is reactive to boom-and-burst shocks that are triggered by oil price regimes. Pearson's correlation analysis is deployed to examine the relationships between the dynamics of crude oil price regimes (volume of crude oil export and price), selected indices of macro variability-lending rate (prime), inflation rate and aggregate GDP growth, and supply deficit (demand-output gap) of local cement production. Analysis shows that construction cost is high because of high cost of finance and wild volatility that are stimulated by frictions in oil price regimes. Moreover, while the Nigerian construction industry shows positive growth and significant contribution to aggregate GDP growth in the past decade, the oil industry has persistently failed to trigger positive GDP growth. Furthermore, the variables under examination (as listed above) are also subjected to regression analysis to develop a mathematical model for predicting construction costs, relative to crude oil shock and defined macro variability indices. Recommendations are made on how to avoid multicollinearity in similar studies and for areas of further studies. |
Keywords | Construction costs; Gross domestic product; Macrovariability; National income; Oil economics |
ANZSRC Field of Research 2020 | 330299. Building not elsewhere classified |
330207. Quantity surveying | |
330203. Building industry studies | |
Public Notes | Files associated with this item cannot be displayed due to copyright restrictions. |
Byline Affiliations | University of Newcastle |
Institution of Origin | University of Southern Queensland |
https://research.usq.edu.au/item/q7410/the-impact-of-oil-price-regimes-on-construction-cost-in-nigeria
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