Measuring and comparing construction costs in different locations: methods and data

International construction cost comparisons are challenging for many reasons, yet they are typically a vital part of construction industry performance measures and comparisons. Methods vary and the collection of relevant and reliable cost data across different countries presents particular problems. This chapter summarises a range of methods used for international construction cost comparisons and explores problems that must be addressed when attempting such comparisons. The concept of purchasing power parity is introduced and its relevance in this context explored. Sources and types of cost data are examined and the advantages and disadvantages of those commonly used are evaluated. The construction section of the World Bank's International Comparison Program is described and the evolution of the methods used to gather and aggregate construction cost data are outlined. Key concerns identified include the need for greater understanding of the theory behind the methods used and further development of data collection and validation processes, including the selection and training of those providing data.