Rethinking Construction Cost Overruns: Cognition, Learning and Estimation

By D. Ahiaga-Dagbui, Simon D. Smith. 2014

114 citations recorded by the source corpus.

Purpose – Drawing on mainstream arguments in the literature, the paper presents a coherent and holistic view on the causes of cost overruns, and the dynamics between cognitive dispositions, learning and estimation. A cost prediction model has also been developed using data mining for estimating final cost of projects. The paper aims to discuss these issues. Design/methodology/approach – A mixed-method approach was adopted: a qualitative exploration of the causes of cost overrun followed by an empirical development of a final cost model using artificial neural networks. Findings – A conceptual model to distinguish between the often conflated causes of underestimation and cost overruns on large publicly funded projects. The empirical model developed in this paper achieved an average absolute percentage error of 3.67 percent with 87 percent of the model predictions within a range of ±5 percent of the actual final cost. Practical implications – The model developed can be converted to a desktop package for qui...

Subfields: Building and Construction, Management Science and Operations Research, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/342c65eda4b66b9fa6cc82d0a77525d74b8fa4f9

Citations in the corpus

• Cost overruns in transportation infrastructure projects: Sowing the seeds for a probabilistic theory of causation (2016, unknown): “Two predominant schools–of-thought have emerged from the on-going discourse regarding the sources of cost overruns (Ahiaga-Dagbui and Smith, 2014).”