Cost Estimation and Prediction for Residential Projects Based on Grey Relational Analysis–Lasso Regression–Backpropagation Neural Network

Abstract

In the early stages of residential project investment, accurately estimating the engineering costs of residential projects is crucial for cost control and management of the project. However, the current cost estimation of residential engineering in China is primarily carried out by cost personnel based on their own experience. This process is time-consuming and labour-intensive, and it involves subjective judgement, which can lead to significant estimation errors and fail to meet the rapidly developing market demands. Data collection for residential construction projects is challenging, with small sample sizes, numerous attributes, and complexity. This paper adopts a hybrid method combining a grey relational analysis, Lasso regression, and Backpropagation Neural Network (GAR-LASSO-BPNN). This method has significant advantages in handling high-dimensional small samples and multiple correlated variables. The grey relational analysis (GRA) is used to quantitatively identify cost-driving factors, and 14 highly correlated factors are selected as input variables. Then, regularization through Lasso regression (LASSO) is used to filter the final input variables, which are subsequently input into the Backpropagation Neural Network (BPNN) to establish the relationship between the unit cost of residential projects and 12 input variables. Compared to using LASSO and BPNN methods individually, the GAR-LASSO-BPNN hybrid prediction method performs better in terms of error evaluation metrics. The research findings can provide quantitative decision support for cost estimators in the early estimation stages of residential project investment decision-making.