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For this method in the compilation of construction price indices the cubic metre is used as a common denominator to compare the costs of a recent construction to costs in a base period. An index of the value per cubic metre is calculated and adjusted for differences in volume, quality, period, and region. These adjustments enable a price index to be prepared. However, the use of this method requires the construction activity included to be homogenous. The index is valid only for each reference building, etc. as it was originally built.

This method is no longer used by any OECD Member country in its pure form, however building volume is used in some countries (by the Netherlands for example) as one of the building characteristics in the regression analysis used in the compilation of the hedonic construction price indices described below.

A variant of this method used in the compilation of an output price index for dwellings in Spain uses the average price per square metre as one of the variables collected in determining the average prices of monitored dwellings.

Source Publication:
Sources and Methods: Construction Price Indices, OECD, Eurostat, 1997, page 21.

Cross References:
Construction price indices
Subsequent breakdown methods (construction price indices)

Statistical Theme: Prices and purchasing power partities

Created on Friday, March 14, 2003

Last updated on Wednesday, April 3, 2013