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Construction Management and Economics (July 2006) 24, 661–668
Guest Editorial
GERARD DE VALENCE*
Faculty of DAB, University of Technology Sydney, PO Box 123, Broadway, New South Wales 2007, Australia
There has been an ongoing discussion about the future
development of construction economics (CE) and the
role theory should take in that development and this
Editorial is a contribution to that debate. The purpose
is to explain the basis for two propositions and argue for
the importance of ‘modern construction economics’.
The first proposition is that CE is a still-emerging field.
The second proposition is that there is a clear
difference between what has been known as building
economics and what is emerging as modern construc-
tion economics. This discussion of two propositions
precedes an introduction to the papers in this special
issue. From this range of contributions and four
possible paths to the future for CE are evident. An
argument for another, fifth approach is also suggested.
Contributions to the debate
The idea that building economics has yet to establish
itself as a discipline begins with Bon’s 1989 book
Building as an Economic Process: An Introduction to
Building Economics. The purpose of the book was to
provide theoretical foundations for building economics.
Bon’s (2001) Note on ‘The future of building
economics’ started with building economics ‘has been
long in emerging because it still lacks solid theoretical
foundations’, and went on to restate argument from the
1989 book with the future being ‘in fields like corporate
real estate and facilities management’ (Bon, 2001,
p. 256).
The next contribution from Ofori (1994) put his
view that construction economics had not developed to
the point where it could be recognised as a distinct part
of general economics. The main reason for this was the
lack of consensus on the ‘main concerns and contents’,
and more importantly it lacked a ‘coherent theory’
(1994, p. 304). Interestingly, there were no challenges
to either the comments or the conclusions in Ofori’s
paper from construction economists. As an aside, in
that paper Ofori also argued for the term ‘construction
*E-mail: g.devalence@uts.edu.au
Construction Management and Economics
ISSN 0144-6193 print/ISSN 1466-433X online # 2006 Taylor & Francis
http://www.tandf.co.uk/journals
DOI: 10.1080/01446190600906779
economics’ as preferable to ‘building economics’
because of its wider scope (1994, p. 296).
Bröchner (2002) took a different view. He starts by
observing that ‘progress in the field of BE has been tied
to increasing sophistication in analyzing and predicting
cost and time of projects or in the analysis of macro
data for the construction sector’, but then asks where it
should be heading. He answers ‘certain types of
economic theory are useful for not only providing ideas
for restructuring commercial relationships in the sector,
but also for predicting the relative sustainability of new
patterns’ (2002, p. 1).
The issue Bröchner addresses is whether building
economics has a role to play in reforming the industry.
He suggests proposals to change the way the industry
works have come from sociology and psychology and
‘building economists appear to have been timid’ in their
application of economic theory:
is the application of economic theory a small niche with
diminishing relevance to a larger community of
researchers and industry practitioners? On the other
hand, how far can construction management research
proceed if it is based exclusively on case studies,
interviews and e-mail questionnaires, with few strong
attempts at theory building, somewhat lax in assump-
tions that are clearly spelled out and where the reason-
ing is weak on testable predictions? It can be argued that
we need more economic analysis if we wish to create a
better industry (Bröchner, 2002, p. 2).
Bröchner then identifies two forces transforming the
construction industry. First, the development of infor-
mation and telecommunications technologies, and
secondly deregulation. Partly in response to these
forces economic theory has developed new approaches
to information, institutions and incentives, particularly
network economics. From this base four topics for
building economics are discussed: access to and use of
quantitative data; signalling in real estate markets;
incentives for growth; and education and competence.
Bröchner concludes: ‘There is reason to believe that
a closer engagement with economic theories of indus-
trial organisation will provide both public and private
policymakers with a better understanding of incentives
662 Guest editorial

for efficient use of scarce resources in the construction
and management of facilities’ (2002, p. 7). (What is
called industry economics Europe is in the US called
industrial organisation.)
The fourth contribution was Myers (2003). In his
analysis of syllabus content of quantity surveying,
construction management and civil engineering courses
at 10 UK universities he followed Ofori’s division of the
discipline into two: construction industry economics,
concerned with the application of economic theory; and
construction project economics, concerned with cost
planning and control, life cycle costing and investment
analysis. Myers found this distinction was reflected in
courses being offered, with the emphasis typically on one
or the other, thus construction economics ‘continues to
lack any coherent conceptual structure’ (2003, p. 103).
Myers then goes on to argue for rethinking construc-
tion economics, purposely echoing the language of the
Egan (1998) report. The courses he surveyed do not
‘concern themselves with the messages generated by
Government reports—in particular those, implicitly or
explicitly, recommending a sustainable outcome’
(2003, p. 104). Myers’ future of CE is based on
sustainability, which will provide both a common
purpose and conceptual approach, thus solving the
two major problems identified by Bon and Ofori.
construction economics. Traditional building econom-
ics (one of the first books to use the term was Seeley
(1972)) was primarily concerned with issues around
project appraisal (see Marshall (1988) for a major work
on investment evaluation) and cost management and
planning techniques (there are many books on cost
planning, e.g. Ferry et al. (1999), now in its seventh
edition). This is construction project economics, to use
Ofori’s term. It could be argued that the three editions
of Hillebrandt’s major work, Economic Theory and the
Construction Industry (1974, 1985, 2000) also belong in
this category (see Myers, 2003, p. 103), because
Hillebrandt has always emphasised the project-based
nature of the industry and the majority of her books are
devoted to microeconomic analysis.
However, it is clear that modern construction
economics has a wider focus than this, and has stronger
links to economics and economic theory. The best
examples are Bon’s collected papers on input–output
modelling (2000), the books by Ive and Gruneberg
(2000) and Gruneberg and Ive (2000) and Runeson
(2000). These books are concerned with the economics
of the building and construction industry, and reflect
the wide-ranging scope of modern economics. In fact a
review of recent construction economics books shows
just how broad a range of topics is covered.

Modern construction economics Recent works

The second proposition underlying this paper is that There are many building economics and/or construc-
there is a clear difference between what has been known tion economics texts (see Table 1). These include
as building economics and what is emerging as modern Briscoe (1988), Ofori (1990), Raftery (1991), Warren

Table 1 Topics found in CE and economics of construction books

Topics Authors
Macroeconomic topics
Aggregate demand and supply Ball, Bon, Briscoe, Cooke, Gruneberg, Myers, Ofori, Raftery, Shutt, Runeson, Warren
Business and building cycles Ball, Bon, Briscoe, Cooke, Finkel, Hillebrandt, I&G, Ofori, Raftery, Runeson
Construction and investment Bon, Finkel, Gruneberg, I&G
Growth and development Cooke, Myers, Ofori
Productivity Briscoe, Finkel, I&G
Microeconomic topics
Inputs and costs Cooke, Gruneberg, Hillebrandt, Myers, Ofori, Raftery, Warren
Revenues and profits Hillebrandt, Raftery, Warren
Labour market and wages Finkel, Gruneberg, Hillebrandt, I&G, Runeson
Contracting system Gruneberg, Hillebrandt, I&G, Ofori
Cost benefit analysis/appraisal Briscoe, Cooke, Gruneberg, Shutt
Industry economics topics
Market structure Ball, Briscoe, Cooke, G&I, Myers, Runeson
Construction markets G&I, Hillebrandt, Warren
Transaction costs G&I, Myers
Theory/role of firms Ball, Briscoe, G&I, Hillebrandt, Myers, Raftery, Shutt
Role of government Ball, Briscoe, Finkel, Ofori, Shutt
Notes: Books are as cited in the text, except Bon (1989) and Finkel (1997). G&I is Gruneberg and Ive (2000), I&G is Ive and Gruneberg (2000).
Guest editorial
(1993), Shutt (1995), Cooke (1996), Gruneberg
(1997), Runeson (2000), Hillebrandt (2000), Ball
(2004) and Myers (2004). In every case there is an
introduction to some basics of modern microeconomics
followed by the development of a demand–supply
model, and usually a chapter or two on the macro-
economic environment for building and construction.
How much room is given to each of these topics varies,
but they all have in common the intent of providing
undergraduate students with a solid grounding in
economic theory and its application to the building
and construction industry. Some of these books are
more project based (e.g. Shutt, Hillebrandt) and others
more industry based (e.g. Warren, Gruneberg,
Runeson).
There are a further two books on the economics of
the construction industry by Ive and Gruneberg (2000)
and Gruneberg and Ive (2000), both rather more
advanced than those cited above and in parts dealing
with acute theoretical issues. For example, some of the
analysis is based on the ideas on value and distribution
of Sraffa (1960), and is carried out with particular
attention to the relationship between value and labour
in the construction industry. Also, there is a rare use of
Morishima’s (1984) flex-price ideas as applied to
construction. These books do put an alternative view
of building economics forward, and in places argue
strongly for a re-evaluation of some of the ideas found
in traditional building economics (for example, their
view of the industry as three separate markets with little
substitution or crossover found on both the demand
and supply sides).
The other content of these books shows considerable
variation, based on the individual author’s emphasis on
certain aspects of the building and construction
industry. For example, Myers includes transaction
costs, Ofori management issues and Runeson has a
chapter on the labour market. Table 1 attempts to
summarise the chapters and topics found in these
books in order to allow a rough comparison.
Table 1 is neither comprehensive nor completely
accurate. It is not comprehensive because there are
many topics covered by one or two authors that have
not been included (e.g. takeovers in Ball (1988);
elasticities in Cooke (1996); bidding theory in
Runeson (2000); sustainability in Myers (2004)), and
it is not completely accurate because it is a broad
classification that does not take into account the many
differences between authors in their individual
approach to a topic or indeed differences in their
definition or delineation of specific topics. However, it
is a useful guide to what the books cover and
similarities and differences between them. While basic
micro and macroeconomics are typically covered,
663
authors clearly make choices about the range of topics
that they include.
The number of authors and topics that have been
listed under industry economics, called industrial
organisation in the US, is interesting, especially in the
light of Bröchner’s argument above about the impor-
tance of topics that come from industry economics as a
theoretical base for construction economics.
One of the other interesting things about the range of
topics covered in these books is the way that many of
them are not found in the construction economics and
construction management journals. Examples are
Hillebrandt’s stages of procurement and market power
typology, market definition as in Gruneberg and Ive,
the industry as perfectly competitive (Runeson, Cooke)
or not (Ive and Gruneberg), and whether the output of
the industry is a product (Ofori) or a service (Runeson,
Hillebrandt). These would seem to be debates worth
pursuing, because the discussion would contribute to
our understanding of the nature of the industry, the
activities undertaken, relationships between players and
theoretical foundations for construction economics.
Future directions
The four paths
From this review of previous work four potential paths
to the future for construction economics have been
identified. Two of these are the familiar construction
industry economics and construction project econom-
ics that have been seen as the traditional set of topics
for the field. The third is the linking of building
economics to facility management (FM) that Bon
advocated, which could include life cycle analysis and
the sustainability agenda of Myers. In effect this is a
transfer of some of the topics in construction project
economics into a new category that might be called
‘facility sustainability’ that focuses on the application of
environmental economics to buildings.
The fourth path is the ‘closer engagement with
economic theories of industrial organization’ that
Bröchner argues for. In industrial organisation major
recent developments have been in game theory and
strategic interactions between firms, the economics of
imperfect competition (product differentiation, price
discrimination), market power and market structure
(particularly in relation to mergers and acquisitions),
procurement theory, auction theory and transaction
costs.
Is this a useful division of topics in construction
economics? These potential paths have all been
trodden, to one extent or another, by researchers in
the field. In particular, the first three of the paths might
664
be better described as the ‘pillars’ of construction
economics, they support the field as it stands but have
not so far delivered a coherent theory, or a recognised
discipline. The fourth path is perhaps a pointer to
another alternative.
An alternative fifth
The range of economic theory has been expanding
rapidly over the last decade with the emergence of a
number of new theories and approaches that changed
or challenged views in both macro and microeco-
nomics. Some examples of areas where rapid theore-
tical developments have been occurring are growth
theory (in various forms, such as evolutionary, endo-
genous and new classical), monetary policy and asset
price bubbles, supply-side shocks, and of course the
many aspects of globalisation. In technology sensitive
markets and industries the effects of network econom-
ics, R&D, innovation and intellectual property have
been hot topics.
All these (and other) theoretical approaches offer
fresh insights and point to potential new research and
policy directions. It should be noted that many of the
ideas found in these new economic theories have not
yet been applied to the building and construction
industry. This would seem to offer potential for
development of theoretical foundations and
new research directions for modern construction
economics.
Introduction to the special issue
This collection of papers reflects very well the range
and diversity of Ranko Bon’s interests, and the
importance of his contribution to building economics.
There are 12 papers in the Festschrift, and they make
this not only a fitting tribute to a colleague, but also a
most interesting edition of the journal that he co-edited
for many years.
The majority of researchers tend be focused on a very
specific topic or, more usually, part of a topic. The
contribution to knowledge of many of journal articles is
therefore incremental, the addition is at the margin of a
well-established set of ideas. Bon was definitely not
in this mould; he sought to reinvent, redefine or
reconceptualise topics he worked on, such as the role
of construction in the economy, the use of input–
output data or the foundations of building economics.
What also distinguished Bon’s work was an endless
curiosity and boundless enthusiasm about the building
and construction industry, its characteristics and
development. He was interested in many aspects of
Guest editorial
the industry and sought to understand it better by
finding underlying characteristics and relationships. In
particular, he applied economic concepts and reasoning
to the industry both consistently and insightfully (for
example, Bon (1991) addressed the question of
subcontracting).
Three major themes, or perhaps these would be
better described as streams, are evident in Bon’s work.
The three broad streams that are identified here may
not be universally agreed (this sort of classification is
always as much a matter of opinion as fact), but they
are useful as a method for getting an overview of the
extraordinary range and extent of Bon’s output. What
follows is not a definitive survey of Bon’s work, and the
intention has been to avoid replicating references given
in the papers themselves as much as possible. Therefore
this is not an exhaustive list of Bon’s publications; that
can be found by putting together the references in the
papers themselves.
Input–output models
Input–output (IO) models and analysis are the focus of
what can be seen as the primary theme in Bon’s
research. The papers collected in Economic Structure
and Maturity (Bon, 2000) were written between the late
1970s and late 1990s, and record Bon’s development of
a supply-side IO model and research into the role of the
construction industry. The papers from the 1980s are
mostly concerned with the conditions attached to
variables in IO models and how these conditions were
reflected in a model’s outputs. His primary insight was
in stability analysis, the changes over time in the values
of coefficients that underlie input–output models. This
was a topic of ongoing interest for Bon, and he
continued to publish IO papers until his retirement
from academic life.
The first paper in this collection in this theme is by
Dietzenbacher and Hoen. They investigate the proper-
ties of demand-side and supply-side IO models to
assess the characteristics of these models under
different conditions. Their finding is that, for specific
industries, Bon’s idea of mature industries being
supply-driven is correct. Therefore the use of the
construction industry proposed by Bon as an ‘Index
of Economic Maturity’ will work for many, but not all,
countries. This paper revisits Dietzenbacher’s impor-
tant reinterpretation of the Ghosh supply-side model as
a price rather than quantity model (see Bon, 2000,
p. 1).
The use of multiregional input–output analysis
(MRIO) was an important feature of Bon’s work. In
Bon (2000, pp. 2–4) he describes his time at MIT in the
first half of the 1970s and his task of finding the cause
of instability in MRIO models. The contribution here
Guest editorial
by McCann is a broad-ranging review of the role of
knowledge spillovers and innovation in regional growth
models. The focus is on the structure of firms and their
knowledge, and the transactions between them in a
spatial context. The paper is informed by the ideas
found in new growth theory and its emphasis on the
importance of local knowledge, human capital and
technology in promoting regional growth. Following
Bon, this is a supply-side approach and is an introduc-
tion to contemporary regional growth analysis.
Another aspect of Bon’s IO research was his
development of the qualitative IO approach, where
the relationships between sectors are positive or zero
(for no direct connection) instead of the values
conventionally given. The paper here by Shipworth is
very much in keeping with the intent of Bon’s work.
Shipworth extends the qualitative IO analysis by adding
estimates of final demand produced from Bayesian
belief network models to create an integrated model for
analysing energy production and consumption. He
argues that this sort of model is needed as a framework
for the policy decisions that will be required for
substantial reductions in greenhouse gas emissions.
The topic of sustainability leads to the paper by
Costantino on Bon’s work on sustainability, from the
mid to late 1990s. This is an interesting look at the role
of Bon as Coordinator of CIB W82 and his contribu-
tion to thinking about the sustainability of the built
environment. The paper demonstrates how Bon
applied economic analysis to an issue, and to quote
Costantino ‘offers a fundamental methodological con-
tribution to the topic of sustainability’.
International construction
A second theme in Bon’s work was international
construction and the role of the industry in the
economies of industrialised and developing countries,
and trends in the international construction market.
Thus there are two aspects to this theme. The first is
the use of IO data, and there is clearly an overlap with
the first theme in Bon’s work. However, because this
research used IO data but did not involve IO theory or
modelling it has been placed in this second theme.
Over the 1990s Bon published a series of papers on
the role of the construction industry in the economy
with a number of collaborators, based on IO tables.
These studies were on both individual countries and
comparisons between countries. In their contribution,
Pietroforte and Gregori follow up Bon’s use of input–
output data for analysing changes in the contribution of
construction to the economy, and changes in the shares
of new work to repair and maintenance. Pietroforte and
665
Gregori test Bon’s proposition that the share of
construction in the economy in the long run will
decline absolutely (i.e. industry capacity will decrease)
as well as relatively. They found that ‘The shrinking
volume of the Danish new residential construction
output partially supports Bon’s proposition that the
relative decline of construction is followed by an
absolute decline of output. No absolute decline was
found in the output of the non-residential and civil
engineering sub-sectors.’
The second paper on this topic is by Ruddock and
Lopes. The Bon curve shows the share in the economy
of construction over the three stages in development for
less developed, newly industrialising and advanced
industrial economies. This paper uses data on 75
countries for gross domestic product (GDP) per capita
and gross value added in the construction industry in
2000. The countries are grouped into four stages of
economic development based on GDP per capita
levels. The analysis found that the inverse ‘U’-shape
of the Bon curve holds for the share of construction in
the economy, with the share of construction in total
output first going up and then coming down with
economic development.
Ruddock and Lopes also use their data set to test the
‘does volume follow share’ proposition. Here the result
contrasts with Pietroforte and Gregori above. Their
conclusion is the ‘absolute decline is not a definitive
pattern of the construction industry in the industrially
advanced countries … We do believe that Bon’s (1990)
analysis, which concerned the period 1970–1985, was
certainly influenced by the recessive period 1973–1982,
which was characterised by two oil shocks’.
The second aspect in this theme is trends in
international construction, in particular changes in
the location of global construction activity and the
competitiveness of different continents as exporters of
construction services and materials. The annual surveys
of trends in international construction started by Bon
were reported in the book by Bon and Crosthwaite
(1999) that summarised the results of eight surveys,
and their Construction Management and Economics paper
in 2001. There are three papers in this area included in
this collection.
First, Dikmen and Birgonul review the extensive
international construction literature to assess Bon’s
contribution. Dikmen and Birgonul suggest that Bon’s
surveys of international construction had three main
aspects: their coverage included less developed and
newly industrialising countries as well as the established
markets in Europe and North America; the continuity
of the surveys allowed broad changes and shifts of
opinion to appear; and testing the hypothesis of the
Bon curve.
666
The second paper is by Hawk, which reprises his
original ‘Conditions of Success’ (COS) study done in
1989. When the findings of the study, a survey of senior
managers from the 60 largest construction firms at the
time, were presented to participants in 1991 Bon was
invited to chair the symposium. This paper outlines
some of the ideas Bon ‘helped weave together to
provide a tapestry of the industry’s future’. It is
interesting rereading the main points from the COS
study now and looking at them from the perspective of
a decade down the track. One feels that Bon would still
endorse the 10 recommendations that resulted from the
project as the construction industry continues to
change and develop along its own rather unique
technological trajectory.
The third paper is by Ganesan and looks at
technology transfer to developing countries through
joint ventures and subcontracting arrangements on
construction projects. Changes in technology and their
effect on the construction industry were of ongoing
interest to Bon. Ganesan’s survey of Sri Lankan
projects found that there were limited channels for
transfer of technology and skills between foreign and
local firms, and that planning for technology transfer is
necessary for it to be effective.
Corporate real estate
A third theme in Bon’s work was corporate real estate
(CRE) and FM. This is a theme that is not covered by a
paper in this Festschrift, and so some space is given to it
here.
Although Bon’s interest in this area was started by his
experience with IBM in the mid-1980s, his publications
in 1994 (Bon, 1994a, 1994b) seem to be the appro-
priate place to mark the start of this theme. In ‘Ten
principles of corporate real estate management’,
Bon defined corporate real estate management
(CREM) as:
the management of buildings and parcels of land at the
disposal of private and public organizations that are not
primarily in the real estate business. An organization
that occupies space is in the real estate business and
needs to manage it properly. CREM covers the entire
range of activities concerning portfolios of buildings and
land holdings: investment planning and management,
financial planning and management, construction plan-
ning and management, and facilities planning and
management (Bon, 1994b, p. 9).
In a series of annual surveys published in Facilities
Bon and his colleagues gathered from senior CRE
managers their view of what they did and how that
contributed to their organisations. These surveys
recorded CREM policies, functions and activities, and
Guest editorial
the relevant knowledge or skills needed. This annual
survey of CRE practices is now part of the Innovative
Construction Research Centre at the University of
Reading. The Bon et al. (2003) paper summarises the
10 annual surveys conducted between 1993 and 2002.
Bon (1994a) and Bon et al. (1999) were comparisons of
CRE practices in Europe and the US. In papers with
McMahan and Carder (Bon et al., 1998) the appro-
priate metrics and methods for property performance
measurement were discussed.
This interest in buildings and their use and reuse was
not new. In a paper that introduces a little known
aspect of Bon’s early research, Steadman discusses
Bon’s Masters thesis (completed in 1972) on the
shapes and spatial relationships of buildings. This
research developed regression lines for ratios of volume
(internal spaces), surface areas (external walls), circula-
tion length and floor area. Steadman’s research
confirms the values for the slopes of the regression
lines in Bon’s results as related to characteristic
dimensions of dwellings.
Applying economic theory
The proposition that building economics is a still-
emerging field and has not established itself as a
discipline can be traced back to Bon’s 1989 book
Building as an Economic Process: An Introduction to
Building Economics. In this book Bon sought a
theoretical framework for building economics in the
application of the ideas of Austrian economics to the
building, construction and property industries. In this
collection of papers de Valence considers the impor-
tance and impact of the book. It is argued that the book
offered a broad reinterpretation of the application of
economic theory to building economics, and concludes
‘The ideas and arguments put forward are important
steps in development of the economic theory of the
built environment, particularly because the inclusion of
the property market in the analysis bought the demand
side together with building and construction on the
supply side.’
One of the topics addressed in Building as an
Economic Process was the effect of industry conditions
(demand and supply sides) on the price of building
work. This topic is reassessed by Skitmore, Runeson
and Chang in their paper. Here two theories of price
formation are considered, with research on the factors
and methods that affect construction prices reviewed.
The paper ranges widely across both time and the
literature, revisits bidding theory and methods used in
preparation of bids by contractors, and summarises the
various theories about production costs, to find that
Guest editorial
neoclassical theory is a useful analytical device but
construction prices are set in the context of a specific
set of market circumstances. This paper is a good
example of the application of economic theory to
building economics, and one that Bon would have
approved of.
Past and future
Finally, Bon’s ideas on the future of building econom-
ics should be discussed. After Bon (1989) suggested
that building economics should pursue greater integra-
tion with FM and building life cycles the increasing
importance of environmental considerations meant
more sophisticated approaches to life cycle costing
and investment analysis were required. Alongside those
developments was the growth of FM as an industry
during the 1990s, based on outsourcing, with the
emergence of its own set of tools and techniques. While
these have rather been parallel developments so far, in
many countries changes in the regulatory requirements
and the use of energy rating systems for new buildings
are now bringing together the pre-construction and
post-construction phases of a building’s life. The
integration Bon anticipated may be under way.
In Bon’s note on ‘The future of building economics’
the argument from the 1989 book was restated, the
future being ‘in fields like corporate real estate and
facilities management’. As Bon put it ‘buildings will be
designed and constructed with the entire building
process, that is, the whole building life, in mind’
(2001, p. 256), again reprising his ideas from 1989.
This idea of ‘the entire building process’ has
informed all Bon’s work, whether in the context of
economic growth and the role of the construction
industry, trends and patterns of change in international
construction, or the maintenance and management of
buildings. It is perhaps the unifying theme that under-
pins the three others used here to organise the varied
and wide-ranging scope of Bon’s work. Going through
the reference lists of the papers in this Festschrift allows
grouping of Bon’s work chronologically. This clearly
shows not only the extraordinary diversity and extent of
Bon’s output, but also how there were often papers
covering several different topics being prepared for
publication simultaneously.
The broad range of Bon’s work and its impact on
building economics are explored in this collection of
papers, many of which respond to his work and provide
an updated view of the field to which he made such a
great contribution. For many years he has been one of
the leading researchers in the field, and his works
continue to be widely cited and referenced. The ideas
667
and thoughts found in his publications have provided a
foundation for building economists into the future.
Some thoughts about future directions
Based on Bon’s legacy, what direction might building
economics take as the field develops? Theoretical
foundations, or lack of, and the future development
of building economics has been the subject of debate
since Bon (1989). Ofori (1994) also shared that view,
and introduced the distinction between building
economics and construction economics. A different
approach was taken by Bröchner (2002) who suggested
that economic theories of industrial organisation (as the
field is called in the US, in Europe this is industry
economics) offer opportunities for analysing the con-
struction industry. Myers (2003) followed with another
view where he suggested a coherent conceptual
structure was lacking, and that sustainability would
provide it.
From this previous work five potential directions for
building economics in the future can be identified. Two
of these are the familiar industry economics and project
economics groupings of topics that have been seen as
the traditional domain of building economics. The
former is concerned with project-level analysis and
topics associated with project costs, cash flow, life cycle
and investment analysis are grouped together. The
latter is concerned with economic theory and industry
issues. This would appear to be an entirely sensible
distinction.
The third is the linking of building economics to FM
that Bon advocated, which could include life cycle
analysis and the sustainability agenda of Myers. In
effect this is a transfer of some of the topics in building
project economics into a new category that might be
called ‘building sustainability’, which focuses on the
application of environmental economics to buildings.
The fourth path is the greater use of economic theories
of industrial organisation that Bröchner argues for. A
fifth path would use recent developments in a range of
economic theories as the starting point for construction
economic research.
Is this a useful division of topics in building
economics? These potential paths have all been
trodden, to one extent or another, by researchers in
the field. In particular, the first three of the paths
might be better described as the ‘pillars’ of building
economics: they support the field as it stands but have
not so far delivered a coherent theory, or a recognised
discipline. To become recognised a wider scope and
more rigorous theoretical foundations appear to be a
necessary, though not perhaps sufficient, condition.
 668
The development of a wider ranging, more con-
temporary building economics would mean a break
with the past. Theories and topics from a diversity of
other disciplines have already been incorporated into
building economics, but there is a great deal more of
management and technical knowledge from other fields
that could complement building economics research.
Although traditional building economics was not overly
concerned with theory, in recent years there has been a
renewal of interest in a range of theoretical issues in
building economics, reflected mainly in books rather
than journals. There is now an opportunity to bring this
theoretical research together and push outward its
frontiers into a body of theory that is unarguably for
and about building economics. In doing so, this would
provide a firm foundation for its future development.
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