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Engineering economics (Civil Engineering)
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'''Engineering Economics in Civil Engineering''', also known generally as [[engineering economics]], is a subset of [[economics]], more specifically, [[microeconomics]]. Its goal is to guide entities, private or public that are confronted with the [[Economic problem|fundamental problem of economics]], it wishes to accomplish more than its resources will permit. <ref name="Hoffer1998">Hoffer, Stefan N. Economic analysis of investment and regulatory decisions: revised guide. 1998. Accessed at https://ift.tt/2R7905A </ref>
This fundamental problem of economics consists of two fundamental questions that must be answered, namely what objectives should be investigated or explored and how should these be achieved? Economics as a social science answers those questions and is defined as the knowledge used for selecting among "…technically feasible alternatives for the purpose of a rational allocation of scarce resources." <ref name="Lesser1969">Lesser Jr, Arthur. "Engineering economy in the United States in retrospect—An analysis." The Engineering Economist 14.2 (1969): 109-116.</ref>
As a subdiscipline practiced by [[civil engineers]], engineering economics narrows the definition of the fundamental economic problem and related questions to that of problems related to the [[Capital|investment of capital]], public or private in a broad array of [[Infrastructure_and_economics#Planning_and_management_of_infrastructure|infrastructure projects]]. Civil engineers confront more specialized forms of the fundamental problem in the form of inadequate economic evaluation of engineering projects.
<ref name="Magyar1968">Magyar, William B. "Economic Evaluation of Engineering Projects." The Engineering Economist 13.2 (1968): 67-86.</ref>
Civil engineers under constant pressure to deliver infrastructure effectively and efficiently confront complex problems associated with allocating scarce resources for ensuring [[ISO 10006|quality]], [[Risk_management#Risk_options|mitigating risk]] and [[Project delivery method|controlling project delivery]]. Civil engineers must be educated to recognize the role played by engineering economics as part of the [[Infrastructure_and_economics#Economic,_social_and_environmental_impacts_of_infrastructure|evaluations]] occurring at each phase in the project lifecycle.<ref name="Magyar1968"/>
Thus, the application of engineering economics in the practice of civil engineering focuses on the decision-making process, its context, and environment in project execution and delivery. <ref name="Dharmaraj2009">Dharmaraj, E.. Engineering Economics. Mumbai, IN: Himalaya Publishing House, 2009. ProQuest ebrary. Web. 9 November 2016.</ref><ref name="Morris1960"> Morris, W. Thomas. (1960). Engineering economy: the analysis of management decisions. Homewood, Ill.: R. D. Irwin.</ref>
It is pragmatic by nature, integrating microeconomic theory with civil engineering practice <ref name="Dharmaraj2009" /> but, it is also a simplified application of economic theory in that it avoids a number of microeconomic concepts such as [[price determination]], [[Competition#Economics_and_business|competition]] and [[supply and demand]].
<ref name="Dharmaraj2009" />
This poses new, underlying economic problems of resource allocation for civil engineers in delivering infrastructure projects and specifically, resources for project management, planning and control functions.
Civil engineers address these fundamental economic problems using specialized engineering economics knowledge as a framework for continuously "… probing economic feasibility…using a stage-wise approach…" throughout the project lifecycle.<ref name="Magyar1968"/> The application of this specialized civil engineering knowledge can be in the form of engineering analyses of [[Life-cycle cost analysis|life-cycle cost]], [[cost accounting]], [[cost of capital]] and the economic feasibility of engineering solutions for design, construction and project management. <ref name="Magyar1968"/> The civil engineer must have the ability to use engineering economy methodologies for the "formulation of objectives, specification of alternatives, prediction of outcomes" and estimation of minimum acceptability for investment and optimization.
<ref name="Peterson1965">George L. Peterson (1965) Toward the Improvement of The Traditional Course In Engineering Economy Through Unification As Applied Decision Theory, The Engineering Economist, 10:4, 17-31, DOI: 10.1080/00137916508928726 </ref>
They must also be capable of integrating these economic considerations into appropriate [[Engineering design process|engineering solutions]] and [[Project plan|management plans]] that predictably and reliably meet [[project stakeholder]] expectations in a [[Sustainable design|sustainable manner]].
The civil engineering profession provides a special function in our society and economy where investing substantial sums of funding in public infrastructure requires "...some assurance that it will perform its intended function."
<ref name="Dingwall2016">Dingwall, Robert. Essays on professions. Routledge, 2016.</ref>
Thus, the civil engineer exercising their professional judgment in making decisions about fundamental problems relies upon the profession's knowledge of engineering economics to provide "the practical certainty" that makes the social investment in public infrastructure feasible. <ref name="Dingwall2016"/>
== See also ==
*[[American Society of Civil Engineers]]
==Further reading==
* [[Arthur M. Wellington|Wellington, A. M.]] (1877).''The Economic Theory of the Location of Railways''. Accessed at [https://ift.tt/2q6qpzv] and revised through six editions with the last published in 1914 by Wellington's wife, Agnes Wellington. Accessed at [https://ift.tt/2R5NSfQ]
* Gotshall, William Charles. (1903) ''Notes on electric railway economics and preliminary engineering''. McGraw Publishing Company. Accessed at [https://ift.tt/2q3mTWE]
* Hayford, John F. (1917) ''The relation of engineering to economics.'' Journal of Political Economy 25.1 : 59-63. Accessed at [https://ift.tt/2R4ATLl]
* [[John Alexander Low Waddell|Waddell, J. A. L.]] (1917). ''Engineering economics''. Lawrence: University of Kansas. Accessed at [https://ift.tt/2q6c4TX]
* Waddell, John Alexander Low. (1921) ''Economics of Bridgework: A Sequel to Bridge Engineering''. J. Wiley & Sons, Incorporated. Accessed at [https://ift.tt/2R0ASbg]
* [[John Charles Lounsbury Fish|Fish, J. C. L.]] (1923). ''Engineering economics: First principles''. New York: McGraw-Hill. Accessed at [https://ift.tt/2q1I1wA]
* [[Eugene L. Grant|Grant, Eugene L.]] (1930) ''Principles of Engineering Economy'', Accessed at [https://ift.tt/2R4AVmr]
* Burnham, T. H., & Hoskins, G. O. (1958). ''Engineering economics'', by T.H. Burnham and G.O. Hoskins. London, Pitman. Accessed at [https://ift.tt/2q3NC5u].
* Sepulveda, Jose A., William E. Souder, and Jose A. Sepulveda. (1984) ''Schaum's Outline of Engineering Economics.'' McGraw-Hill Companies. Accessed at [https://ift.tt/2R2d1YP]
* Newnan, Donald G., et al. (2004) ''Engineering economic analysis''. Vol. 2. Oxford University Press. Accessed at [https://ift.tt/2q2tWyP]
==References==
[[Category:Business economics]]
[[Category:Cost engineering]]
[[Category:Civil engineering]]
[[Category:Economic theories| ]]
Liquid error: wrong number of arguments (1 for 2)
'''Engineering Economics in Civil Engineering''', also known generally as [[engineering economics]], is a subset of [[economics]], more specifically, [[microeconomics]]. Its goal is to guide entities, private or public that are confronted with the [[Economic problem|fundamental problem of economics]], it wishes to accomplish more than its resources will permit. <ref name="Hoffer1998">Hoffer, Stefan N. Economic analysis of investment and regulatory decisions: revised guide. 1998. Accessed at https://ift.tt/2R7905A </ref>
This fundamental problem of economics consists of two fundamental questions that must be answered, namely what objectives should be investigated or explored and how should these be achieved? Economics as a social science answers those questions and is defined as the knowledge used for selecting among "…technically feasible alternatives for the purpose of a rational allocation of scarce resources." <ref name="Lesser1969">Lesser Jr, Arthur. "Engineering economy in the United States in retrospect—An analysis." The Engineering Economist 14.2 (1969): 109-116.</ref>
As a subdiscipline practiced by [[civil engineers]], engineering economics narrows the definition of the fundamental economic problem and related questions to that of problems related to the [[Capital|investment of capital]], public or private in a broad array of [[Infrastructure_and_economics#Planning_and_management_of_infrastructure|infrastructure projects]]. Civil engineers confront more specialized forms of the fundamental problem in the form of inadequate economic evaluation of engineering projects.
<ref name="Magyar1968">Magyar, William B. "Economic Evaluation of Engineering Projects." The Engineering Economist 13.2 (1968): 67-86.</ref>
Civil engineers under constant pressure to deliver infrastructure effectively and efficiently confront complex problems associated with allocating scarce resources for ensuring [[ISO 10006|quality]], [[Risk_management#Risk_options|mitigating risk]] and [[Project delivery method|controlling project delivery]]. Civil engineers must be educated to recognize the role played by engineering economics as part of the [[Infrastructure_and_economics#Economic,_social_and_environmental_impacts_of_infrastructure|evaluations]] occurring at each phase in the project lifecycle.<ref name="Magyar1968"/>
Thus, the application of engineering economics in the practice of civil engineering focuses on the decision-making process, its context, and environment in project execution and delivery. <ref name="Dharmaraj2009">Dharmaraj, E.. Engineering Economics. Mumbai, IN: Himalaya Publishing House, 2009. ProQuest ebrary. Web. 9 November 2016.</ref><ref name="Morris1960"> Morris, W. Thomas. (1960). Engineering economy: the analysis of management decisions. Homewood, Ill.: R. D. Irwin.</ref>
It is pragmatic by nature, integrating microeconomic theory with civil engineering practice <ref name="Dharmaraj2009" /> but, it is also a simplified application of economic theory in that it avoids a number of microeconomic concepts such as [[price determination]], [[Competition#Economics_and_business|competition]] and [[supply and demand]].
<ref name="Dharmaraj2009" />
This poses new, underlying economic problems of resource allocation for civil engineers in delivering infrastructure projects and specifically, resources for project management, planning and control functions.
Civil engineers address these fundamental economic problems using specialized engineering economics knowledge as a framework for continuously "… probing economic feasibility…using a stage-wise approach…" throughout the project lifecycle.<ref name="Magyar1968"/> The application of this specialized civil engineering knowledge can be in the form of engineering analyses of [[Life-cycle cost analysis|life-cycle cost]], [[cost accounting]], [[cost of capital]] and the economic feasibility of engineering solutions for design, construction and project management. <ref name="Magyar1968"/> The civil engineer must have the ability to use engineering economy methodologies for the "formulation of objectives, specification of alternatives, prediction of outcomes" and estimation of minimum acceptability for investment and optimization.
<ref name="Peterson1965">George L. Peterson (1965) Toward the Improvement of The Traditional Course In Engineering Economy Through Unification As Applied Decision Theory, The Engineering Economist, 10:4, 17-31, DOI: 10.1080/00137916508928726 </ref>
They must also be capable of integrating these economic considerations into appropriate [[Engineering design process|engineering solutions]] and [[Project plan|management plans]] that predictably and reliably meet [[project stakeholder]] expectations in a [[Sustainable design|sustainable manner]].
The civil engineering profession provides a special function in our society and economy where investing substantial sums of funding in public infrastructure requires "...some assurance that it will perform its intended function."
<ref name="Dingwall2016">Dingwall, Robert. Essays on professions. Routledge, 2016.</ref>
Thus, the civil engineer exercising their professional judgment in making decisions about fundamental problems relies upon the profession's knowledge of engineering economics to provide "the practical certainty" that makes the social investment in public infrastructure feasible. <ref name="Dingwall2016"/>
== See also ==
*[[American Society of Civil Engineers]]
==Further reading==
* [[Arthur M. Wellington|Wellington, A. M.]] (1877).''The Economic Theory of the Location of Railways''. Accessed at [https://ift.tt/2q6qpzv] and revised through six editions with the last published in 1914 by Wellington's wife, Agnes Wellington. Accessed at [https://ift.tt/2R5NSfQ]
* Gotshall, William Charles. (1903) ''Notes on electric railway economics and preliminary engineering''. McGraw Publishing Company. Accessed at [https://ift.tt/2q3mTWE]
* Hayford, John F. (1917) ''The relation of engineering to economics.'' Journal of Political Economy 25.1 : 59-63. Accessed at [https://ift.tt/2R4ATLl]
* [[John Alexander Low Waddell|Waddell, J. A. L.]] (1917). ''Engineering economics''. Lawrence: University of Kansas. Accessed at [https://ift.tt/2q6c4TX]
* Waddell, John Alexander Low. (1921) ''Economics of Bridgework: A Sequel to Bridge Engineering''. J. Wiley & Sons, Incorporated. Accessed at [https://ift.tt/2R0ASbg]
* [[John Charles Lounsbury Fish|Fish, J. C. L.]] (1923). ''Engineering economics: First principles''. New York: McGraw-Hill. Accessed at [https://ift.tt/2q1I1wA]
* [[Eugene L. Grant|Grant, Eugene L.]] (1930) ''Principles of Engineering Economy'', Accessed at [https://ift.tt/2R4AVmr]
* Burnham, T. H., & Hoskins, G. O. (1958). ''Engineering economics'', by T.H. Burnham and G.O. Hoskins. London, Pitman. Accessed at [https://ift.tt/2q3NC5u].
* Sepulveda, Jose A., William E. Souder, and Jose A. Sepulveda. (1984) ''Schaum's Outline of Engineering Economics.'' McGraw-Hill Companies. Accessed at [https://ift.tt/2R2d1YP]
* Newnan, Donald G., et al. (2004) ''Engineering economic analysis''. Vol. 2. Oxford University Press. Accessed at [https://ift.tt/2q2tWyP]
==References==
[[Category:Business economics]]
[[Category:Cost engineering]]
[[Category:Civil engineering]]
[[Category:Economic theories| ]]
https://ift.tt/2NTeQ8D
