Research on construction prices is significant for contractors and traders. A comprehensive understanding of construction prices may influence crucial decisions in business operation and arbitrage activities. This study focuses on the cointegration relationships of regional construction prices in Australia by using a range of econometric techniques including the stationarity test, the Engle-Granger cointegration approach and error correction model. The cointegration relationships amongst the regional construction prices are detected in this study. The application of the Engle-Granger cointegration approach examines the long run equilibrium relationships within the regional markets, and the error correction models explore the short run disequilibrium relationships. Results of this study suggest that the economic system in which construction industry participants operate is characterised by a highly competitive integrated marketplace. Furthermore, the causalities and diffusion patterns among the construction price indices in six states and two territories of Australia are drawn by the cointegration analysis. These outcomes reveal a pattern of diffusion paths and network linkages among the six states and two territories, and then expose the regional price linkages.
History
Journal
International journal of economics and finance
Volume
2
Pagination
3-14
Location
Toronto, Canada
ISSN
1059-0560
eISSN
1916-9728
Language
eng
Notes
Reproduced with the specific permission of the copyright owner.
Publication classification
C1 Refereed article in a scholarly journal
Copyright notice
2010, Canadian Center of Science and Education (CCSE)