The Application of Cobb-Douglas Production Cost Functions to Construction Firms in Japan and Taiwan

Abstract

One of the most attractive issues in the construction industry today is cost reduction because depression is coming after Japan's bursting bubbles and spreading to other Asian countries. However, most researchers do not know how to solve this problem because they still know very little about the relationship between cost and output for the construction industry. Therefore, the author tried to analyze the cost function of construction firms with due consideration of their available resources by using Cobb-Douglas Production and Cost Functions in this paper. By statistical analysis, the cost and production functions of Japan's and Taiwan's construction firms were discovered.