LCA Research Brief: Accounting for Inflation in LCCA

July 1, 2011

This study examines historical data on real prices of construction materials, and finds that the assumption of constant real costs is seriously inconsistent with historical experience. Ignoring that experience can lead to serious cost overruns. To avoid such overruns, this study suggests the use of material-specific escalation rates that can be easily implemented into the LCCA practice to reflect changes in relative commodity prices. MORE