Currency conversions for construction cost comparisons: Purchasing power parities and exchange rates

Rick Best*

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingConference contributionResearchpeer-review

Abstract

The method used to convert construction costs to a common currency can have significant effects on the results obtained from comparative studies. The relationship between purchasing power parities (PPPs), both general and construction-specific, and market exchange rates with respect to the Australian dollar and three other major currencies was examined over the period 1990-2003. Trends over time were identified using linear regression and it was shown that there is little consistency in the relationship between general PPPs, average exchange rates and other indices. This highlights the need for reliable industry-specific conversion factors as currently there is no method available that can be shown to be more reliable than any other, and studies that do not include rigorous testing of the conversion approach used must produce questionable results.

Original languageEnglish
Title of host publicationCME 2007 Conference - Construction Management and Economics: 'Past, Present and Future'
Pages1767-1776
Number of pages10
Publication statusPublished - 2007
Externally publishedYes
EventConstruction Management and Economics (CME) Conference: Past, Present and Future - Reading, United Kingdom
Duration: 16 Jul 200718 Jul 2007
Conference number: 25th

Conference

ConferenceConstruction Management and Economics (CME) Conference
Abbreviated titleCME 25
CountryUnited Kingdom
CityReading
Period16/07/0718/07/07

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  • Cite this

    Best, R. (2007). Currency conversions for construction cost comparisons: Purchasing power parities and exchange rates. In CME 2007 Conference - Construction Management and Economics: 'Past, Present and Future' (pp. 1767-1776)