99619 - CONSTRUCTION INDUSTRY ECONOMICS AND MANAGEMENT

Learning outcomes

Through this course, the student learns the basic elements of applied economic analysis, and the principles of business organization, management and strategies. Furthermore, the course introduces the student to the study of the construction industry from an economic perspective. At the end of the course, the student matures economic thinking, develops analytical skills and is able to handle economic and management theories, methods and tools (i.e., databases) to analyze autonomously selected industries and territories. Furthermore, the student achieves a working knowledge of the construction sectors in terms of key economic drivers, business organization and management, innovation performance, national policy and regulatory framework, as well as appraisal techniques.

Course contents

Within the course “INTRODUCTION TO APPLIED ECONOMIC ANALYSIS AND INDUSTRY STUDIES”, a specific module entitled “CONSTRUCTION INDUSTRY ECONOMICS AND MANAGEMENT” aims at introducing the basic elements of real estate and project appraisal. It is structured into two parts, that illustrate different evaluation and appraisal techniques concerning applications and case studies. During the course, some exercises are also proposed to the students to apply the explained methodologies to real evaluation problems, according to a learning-by-doing approach. At the end of the course, the student will have an overview of the discipline, with a specific focus on the real estate market.

Part 1 – Real Estate Market (20 hours)

The first part starts by illustrating some fundamental concepts of real estate and project appraisal: private and public goods, real estate market characteristics, market value, capitalization value, cost value, substitution value, transformation value, and complementary value. These concepts are then useful for the comprehension of the main evaluation techniques explained, which include mono-parametric evaluation, sales comparison approach and income capitalization approach. For this module, a market value assessment exercise for a property will be proposed to the students.

Part 2 – Feasibility assessment and decision support tool (20 hours)

The second part introduces the concept of decision-making in public and private contexts, with a focus on the feasibility assessment of the interventions. More in detail, this module presents the Cash Flow Analysis (CFA), the Cost-Benefit Analysis (CBA) and the Multicriteria Analysis (MCA). Additionally, some perspectives on the evaluation of the sustainability in construction industry are presented. For this second part, the students will develop an exercise concerning the application of the CFA to a real-world case study in the construction sector.

Readings/Bibliography

“Attending students” – students who regularly attend the course will study the slides provided by the teacher.

“Not-attending students” – students who will not be taking the course regularly will study the slides of the course and the following book:

Manganelli, B. Real Estate Investing. Market Analysis, Valuation Techniques, and Risk Management. Springer Cham, 2015, 1, 210 (chapters “ The Real Estate Market" and “Investment Evaluation”).

Teaching methods

For “attending students”: frontal lectures, development of two assignments and review and discussion in class.

For “not-attending students”: individual study of the educational materials and the text.

Students are required, within one week from the beginning of the course, to decide whether to be “attending students” or not.

Assessment methods

i) Assessment for “attending students”:

Attending students will do the two scheduled assignments, which will be worth 50% of the final grade. The exam will be oral and will include a discussion of the exercises performed and a few questions on the course program. Exam mark: 50% assignments + 50% questions on the course program.

 

ii) Assessment for “not-attending students”:

Not-attending students will take a written exam (both multiple choice questions and open questions) at the end of the course accounting for 100% of the mark. This exam is based on the study of the education materials and the text.

Teaching tools

Frontal teaching delivered with the support of PPT presentations. Exercise and revision are scheduled in presence. Active participation in discussion and classwork is required.

Office hours

See the website of Caterina Caprioli