LEARNING OUTCOMES

The course on Buildings Economics provides the basics elements on cost-benefit analysis and knowledge on methodologies for the valuation of investment projects. Attention is dedicated to net present value, internal rate of return, payback period and profitability index so to take into account cash flows (costs and revenues) over time as well as techniques for the management of risk and uncertainty with applications to case studies for the valuation of real-estate construction, renovation, investment and management.

AIMS AND LEARNING OUTCOMES

The course on Buildings Economics provides the basics elements on methods of economic evaluation to discuss and compare the cost effectiveness of a project’s alternatives. The course equips to understand the concept of the time value of money and the operations of discounting as well as the approaches to perform evaluations in face of inflation and tax effect adjustments. Furthermore, the course provides knowledge to apply the methods of economic evaluation and techniques for dealing with uncertainty and risk to solve real-world problems.

SYLLABUS/CONTENT

The course is balanced between the theoretical and practical issues of building economics. It has four major parts: Part 1 of the course presents methods of economic evaluation and shows how and how not to use them. Simple problems illustrate the methods. Part 2 explains how to perform evaluations in the face of inflation, how to adjust for tax effects, and how to find and use necessary data. Part 3 presents techniques for dealing with uncertainty and risk. Part 4 demonstrates how to apply the methods of economic evaluation and techniques for dealing with uncertainty and risk to solve real-world problems.

RECOMMENDED READING/BIBLIOGRAPHY

1. Rosalie T. Ruegg, Harold E. Marshall (1990), Building Economics, theory and practice;

2. Task Group 4, Life Cycle Costs in Construction, Version 29 October 2003. Final Report;

3. Davis Langdon (2007), Towards a common European methodology for Life Cycle Costing (LCC) - Literature Review. Final Review.