Building Economics

Introduction to Building Economics as related to Architecture

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Introduction to Building Economics

Building economics is concerned with production and consumption and services and the analysis of commercial activities –

As it is related to architecture and building activity – all types of buildings for all types of functions by the builders (production) and consumption i.e., the ones who either buy or hire those buildings for various functions with the services offered by professionals like architects, planners, engineers etc.

Ends – scarce means

The scarce means like land, building materials, and allied services result in failing to meet the deman in housing sector.

Basic concept – any activity (legally permitted) which shall result in building activities to serve people for which the people are ready to pay the price directly or indirectly by buying or hiring the spaces can be treated as an economic activity.

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Basic Inputs into Building Construction | Engineering Economics

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Building Construction Economics

We will be discussing Inputs into Building Construction in terms of four important factors:

  1. Land
  2. Labour
  3. Capital
  4. Materials

Land

Marshall defines Land “Land means the materials, and the forces which nature gives us freely for the human beings (other creatures as well), in land, in water, in air, light and Heat”.

  • Land is nature’s gift
  • Land has no supply price (supply remains same) whether price of land is high or low
  • Land is permanent (lack of mobility)
  • Land lacks mobility in geographic sense
  • Provides infinite variation in fertility, utility, situation etc

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Equity Versus Efficiency | Building Economics

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Efficiency in Economics

Capability and able to perform duties well. The efficiency in production of building materials is high as there is competition and those who work in production are offered annual bonus depending upon the profits made by companies.

The efficiency in construction industry is generally high if the projects are handled by Architects, Engineers, and experienced builders. Unfortunately many constructions re handled by builders who are not experienced.

This is due to the ignorance of the public and loss of investments by the public. Most of such constructions are mediocre.

Equity in Economics

The central Government helps the public in offering fair rates of interest of the public invests in Central Schemes like Indira Vikaas Patrika (IVP), Postal Savings schemes which offer Monthly income schemes on investment in Postal saving schemes and they offer interest on fixed deposit also. Share market is most risky as it is volatile.