Investigating the impact of construction costs and land prices on Iran's economic development using PCA method

Mansouri Najafabadi, Nasrin; Shahrkhani Tehrani, Mehran; Elmimoghaddam, Mostafa

doi:10.22034/uep.2025.544586.1703

Investigating the impact of construction costs and land prices on Iran's economic development using PCA method

Articles in Press

Document Type : Original Article

Authors

Nasrin Mansouri Najafabadi ¹

Mehran Shahrkhani Tehrani ²

Mostafa Elmimoghaddam ³

¹ Assistant Professor, Department of Economics, Payam Noor University, Tehran, Iran

² Master's degree student, Department of Economics, Payam Noor University, Tehran, Iran

³ Assistant Professor, Department of Economics, Payame Noor University, Tehran, Iran

10.22034/uep.2025.544586.1703

Abstract

The aim of this study is to investigate the impact of construction costs and land prices on Iran's economic development during the period 1380 to 1400. This study is located in the field of macroeconomics and uses the variables of economic growth rate, Gini coefficient, unemployment rate, Legatum prosperity index, and human development index to form an economic development index using the PCA method. Also, for construction costs, the variable of average estimated building cost was used, and for land price, the land price index was used. The estimation model of this study is ARDL, and descriptive statistics tests, ADF stationarity, classical assumptions, CUSUM structural break, bounds (Bound Test), and error correction of the ECM model were used for data analysis. The findings of this study showed that construction costs and land prices had a negative and significant relationship with Iran's economic development during the period in question. It is worth noting that the limitation of this study is related to its data, which only uses data from urban areas of Iran and statistics from rural areas are not available.

Keywords

Construction industry

economic development

construction costs

land prices

Iranian economy

PCA method

Subjects