Factor cost indices practices in the building industry for Nairobi, Kenya

Abstract

Purpose

The purpose of this paper is to look at the applications of factor cost indices in the building industry in Nairobi, Kenya against the possibilities established through a review of the principles so as to establish the extent of use in practical situations in the industry. There are two organisations involved in compilation of factor cost indices in Kenya – Central Bureau of Statistics and Joint Building Council (JBC). Their practices for compilation of factor cost indices are reported in this paper.

Design/methodology/approach

The paper reviews the principles of factor cost index in order to establish a conceptual framework within which practices are then evaluated. The statistical bureau's compilation of building cost indices and the instructions by the JBC are considered as available evidence of application.

Findings

The paper finds that the application of factor cost index in Kenya is limited, a situation that therefore demands more research by the construction industry in Kenya.

Originality/value

The research's originality lies in its supportive evaluation of the application of the indicator concept in the building industry. More applications would imply greater possibilities for research and development within the case study industry.

Citation

Gichunge, H.K., Masu, S.M. and K'Akumu, O.A. (2010), "Factor cost indices practices in the building industry for Nairobi, Kenya", Journal of Financial Management of Property and Construction, Vol. 15 No. 1, pp. 61-70. https://doi.org/10.1108/13664381011027980