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Appendix D: Technical Change and Its Impact on Construction Productivity--Paul M. Goodrum
Pages 76-94

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From page 76...
... Research conducted through the Sloan Center for Construction Industry Studies at the University of Texas at Austin examined labor and partial factor productivity trends using microeconomic data for 200 construction activities as part of a larger effort to analyze the relationship between equipment technology and construction productivity (Goodrum et al., 2002)
From page 77...
... Outside of commercial estimation manuals, there are relatively few sources of other micro productivity measures in the construction industry. One source is the Construction Industry Institute (CII)
From page 78...
... Together, these sections present a comprehensive perspective regarding the relationship between technology and productivity in the construction industry. EQUIPMENT TECHNOLOGY Koch and Moavenzadeh (1979)
From page 79...
... . Expected physical output, labor input cost, and equipment input cost data from the estimation manuals were also used to calculate each activity's partial factor productivity (Equation D.2)
From page 80...
... This is based on the assumption that changes in quality would be minimal, since the research examined construction activities that had not changed in scope between 1976 and 1998. Next, the percentage change in labor and partial factor productivity from 1976 to 1998 was measured for each activity using equations D.3 and D.4: % Change in Labor Productivity, '76-'98 = ( Labor Productivity, '98 – Labor Productivity, '76 Labor Productivity, '76 )
From page 81...
... that characterize significant changes in equipment technology related to improvement of the productivity of construction activities: • Amplification of human energy -- Amplification of human energy involves technology designed to make an activity physically easier to perform. In its simplest terms, this amplification can be regarded as the shift in energy requirements from human to machine and causing an increase in machine output (e.g., revolutions per minute, horsepower)
From page 82...
... Perhaps ergonomic changes reduce insurance costs through a reduction in workers' compensation and health insurance claims, but this study did not measure the insurance costs by activity. Previous research included regression models of the equipment technology characteristics on changes in both labor and partial factor productivity (Goodrum and Haas, 2002, 2004)
From page 83...
... MATERIAL TECHNOLOGY Other research has examined the relation between changes in material technology and construction productivity. These analyses examined how changes in material technology have influenced labor and partial factor productivity in the U.S.
From page 84...
... The purpose of including this factor is to measure the benefits of "customizing" materials in a controlled environment under ideal conditions before actual installation. Similar to the finding from the equipment technology analyses, the activities that experienced improvement in the above material technology traits experienced more improvements in labor and partial factor productivity than those activities that did not (Table D.5)
From page 85...
... 6, Equation B The material technology variables of installation flexibility and modularization produced statistically significant effects, above the 95 percent confidence level, and these variables, along with the MTI, explained 48 percent of the total variation in partial factor productivity, according to the adjusted R-squared value.
From page 86...
... While previously related productivity research examined longitudinal changes in equipment and material technology, research on the relation of IT and construction productivity has taken more of a latitudinal approach considering the relatively short history of construction projects' use of IT. A number of research efforts have examined the impact of specific applications of IT and construction performance.
From page 87...
... based on the following equation: P −P P = raw raw min (P −P ) +P D.7 −P norm norm max norm min norm min P raw max raw min In Equation D.7, Pnorm is the normalized productivity and, Praw is the raw productivity measure; Prawmin and Prawmax are the minimum and maximum raw productivity values in the construction task; and Pnormmin and Pnormmax are the minimum and maximum normalized productivity values, equal to 1 and 10, respectively.
From page 88...
... b Denotes significance at 0.15. The described t-test results were based on normalized productivity measures in order to preserve the confidentiality of the CII BM&M data and also to allow analysis across different tasks and trades, since the normalized productivity measures are dimensionless (Zhai et al., 2009)
From page 89...
... There is evidence that technical change is likely influencing the industry measures of construction output, and it is the writer's opinion that this influence needs to be considered in construction inflation indexes to help develop reliable industry measures of construction productivity. As mentioned previously, other researchers have expressed concerns regarding the need to understand how changes in the quality of construction influence the measure of the industry's real output (Rosefielde and Mills, 1979: Pieper 1990; Gullickson and Harper, 2002)
From page 90...
... The hedonic regression models are primarily based on a 1970s-style ranch home; thus, it is plausible that other characteristics resulting from technical advances of modern home structures that are significantly related with new home prices, but not included in the hedonic regression, may inflate the price variables due to omitted variable bias. If the price variables are overestimated, this effect could contribute to overestimating the Census Bureau's price index, which would underestimate the real output of the residential sector.
From page 91...
... . For the industrial sector, the framework for a model price index exists through the Construction Industry Institute's model plant.
From page 92...
... 2002. Partial factor productivity and equipment technology change at the activity level in the U.S.
From page 93...
... 2007. Can Measurement Error Explain the Weakness of Productivity Growth in the Canadian Construction Industry.
From page 94...
... 1981. An examination of the productivity decline in the construction industry.


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