Building material price differentiation across geographic locations in South Africa

Abstract

This study examined the price of building materials and whether there are significant differences in the prices across South Africa and between retailers. The rationale stems from reports that there is a differential in building material prices across South Africa. However, it is not known whether location is a key factor in the price differentials. The research employed a quantitative approach. The data gathered were analysed using geographic information system (GIS) technology. The research established that there was significant variation in building material prices across South Africa and between retailers, and that when distributed by provinces, the relationship between price and distance varies between inverse and direct and is somewhat significant. Based on these findings, the research concludes that the distance of the retailer from the manufacturer is a weak predictor of price in a location, and recommends that further studies be undertaken to develop a model for use in explaining location differentials in national project procurement. The study contributes to the discussion on how recent developments such as the GIS technology can be used in identifying the areas in which there are building material price differentials, leveraging more economical infrastructure projects and proposing alternative innovative construction technologies.