Quantifying the Impact of COVID-19 on the Transportation Construction Industry Using Regime Switching Models
Publication: Construction Research Congress 2024
ABSTRACT
COVID-19 has unprecedentedly impacted the transportation construction industry. Highway agencies are facing great challenges posed by the pandemic, including labor shortage, project delays, and increasing costs. The research objective of this paper is to quantify effects of COVID-19 on US transportation construction material prices. Markov switching regression and causality inference were used to empirically analyze the relationship between transportation construction material prices and indicators monitoring different aspects of COVID-19 effects and government response. The results reveal the lasting adverse impact of the pandemic on volatility in material prices. The extent of recovery was highly dependent on the degree of economic support and lockdown measures. Causality test confirms that stringency index, economic support, and number of confirmed cases are leading indicators of transportation construction material prices. This research contributes to the body of knowledge by (1) establishing a statistical method for quantifying impact of COVID-19 on transportation construction industry, and (2) analyzing material prices in transportation construction industry before, during, and after COVID-19. It is anticipated that the results will help policymakers grasp the impact of COVID-19 on transportation construction activities and design more effective policies to respond to future pandemics.
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Construction Research Congress 2024
Pages: 245 - 252
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Published online: Mar 18, 2024
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