Urban Economics and Planning

Urban Economics and Planning

An analysis of the impact of construction cost and land price on the economic development of Iran using PCA

Document Type : Original Article

Authors
1 Assistant professor, Department of Economics, Payame Noor University, Tehran, Iran
2 Master’s graduate, Payame Noor University, Tehran, Iran
Abstract
This research aims to examine the impact of construction costs and land prices on economic development in Iran during the period from 1380 to 1400 M. This research falls within the field of macroeconomics. It employs variables such as economic growth rate, Gini coefficient, unemployment rate, Legatum Prosperity Index, and Human Development Index to construct an Economic Development Index using PCA; additionally, for construction cost, the average building cost estimate is used, and for land price, the land price index is utilized. The estimation model of this research is ARDL, and for analysis, data were also analyzed using descriptive statistics, ADF stationarity tests, classical assumptions, CUSUM structural break tests, the Bound Test, and the ECM error correction model. The findings of this study showed that the cost of construction and land price had a negative and significant relationship with the economic development of Iran during the period under consideration. It is worth noting that the limitation of this study lies in its data, as only data from urban areas of Iran were used, and statistics for rural areas were not available.
Keywords
Subjects

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Volume 7, Issue 7
In Process
October 2026
Pages 16-29

  • Receive Date 01 September 2025
  • Revise Date 23 October 2025
  • Accept Date 27 October 2025