A study of clients' and estimators' tolerance towards estimating errors
Cheung, Franco K. T. , Wong, Margie W. L. , & Skitmore, Martin (2008) A study of clients' and estimators' tolerance towards estimating errors. Construction Management and Economics, 26(4), pp. 349-362.
Previous research on building pretender cost estimating stresses the importance of giving accurate estimates and minimizing estimating errors. Cost models, especially those mathematical models using mean square error or the like for model training and validation, often treat positive errors (overestimates) and negative errors (underestimates) of equal magnitude the same. The implicit assumption is that the regret or disutility of positive errors (overestimates) is equal to that of negative errors (underestimates).
A survey was conducted in Hong Kong to study estimating practice and in particular, the attitude of clients and estimators towards estimating errors. This involved the use of regression analysis to model the relative disutility of underestimates (in terms of overestimates) for four different building types.
The results suggest that both clients and estimators are risk-averse - tolerating overestimates more than underestimates - and, arguably, clients are satisfied with overestimates. The study also revealed contrasting views between clients and estimators on the desired characteristics of estimates, with clients considering the ability to identify cost sensitive elements to be more important than accuracy.
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|Item Type:||Journal Article|
|Keywords:||Expert judgement, cost planning, client, accuracy, disutility, survey, statistical regression|
|Subjects:||Australian and New Zealand Standard Research Classification > BUILT ENVIRONMENT AND DESIGN (120000) > BUILDING (120200) > Building Construction Management and Project Planning (120201)|
Australian and New Zealand Standard Research Classification > BUILT ENVIRONMENT AND DESIGN (120000) > BUILDING (120200) > Quantity Surveying (120203)
|Divisions:||Past > QUT Faculties & Divisions > Faculty of Built Environment and Engineering|
Past > Schools > School of Urban Development
|Copyright Owner:||Copyright 2008 Taylor & Francis|
|Copyright Statement:||This is an electronic version of an article published in [Construction Management and Economics 26(4):pp. 342-362.]. [Construction Management and Economics] is available online at http://dx.doi.org/10.1080/01446190701802380|
|Deposited On:||09 Oct 2008|
|Last Modified:||29 Feb 2012 23:50|
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