Time-to-Plan Lags for Commercial Construction Projects

49 Pages Posted: 26 Jun 2012

See all articles by Stephen D. Oliner

Stephen D. Oliner

American Enterprise Institute

Daniel E. Sichel

Wellesley College; NBER

Jonathan N. Millar

Board of Governors of the Federal Reserve System

Multiple version iconThere are 4 versions of this paper

Date Written: April 10, 2012

Abstract

We use a large project-level dataset to estimate the length of the planning period for commercial construction projects in the United States. We find that these time-to-plan lags are long, averaging about 17 months when we aggregate the projects without regard to size and more than 28 months when we weight the projects by their construction cost. The full distribution of time-to-plan lags is very wide, and we relate this variation to the characteristics of the project and its location. In addition, we show that time-to-plan lags lengthened by 3 to 4 months, on average, over our sample period (1999 to 2010). Regulatory factors help explain the variation in planning lags across locations, and we present anecdotal evidence that links at least some of the lengthening over time to heightened regulatory scrutiny.

Keywords: Time to plan, gestation lags, construction, investment, commercial real estate

JEL Classification: E22, R33, L74

Suggested Citation

Oliner, Stephen D. and Sichel, Daniel E. and Millar, Jonathan N., Time-to-Plan Lags for Commercial Construction Projects (April 10, 2012). FEDS Working Paper No. 2012-34, Available at SSRN: https://ssrn.com/abstract=2093480 or http://dx.doi.org/10.2139/ssrn.2093480

Stephen D. Oliner

American Enterprise Institute ( email )

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HOME PAGE: http://www.aei.org/scholar/stephen-d-oliner/

Daniel E. Sichel

Wellesley College ( email )

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Wellesley, MA 02181
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NBER ( email )

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Jonathan N. Millar (Contact Author)

Board of Governors of the Federal Reserve System ( email )

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Washington, DC 20551
United States

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