The effect of price on the quality of public construction in Japan

Kentaro Hatsumi and Rieko Ishii

Japan and the World Economy, 2022, vol. 62, issue C

Abstract: We examine whether the price affects the contractor’s choice of quality using the ex-post quality evaluation data of public construction projects conducted by Ise City in Japan. Ise City employs a sealed-bid first-price auction with reserve and minimal prices in the selection of contractors. Upon completion of the project, Ise City evaluates the quality of the work using a 100-point scale score based on items such as administration, safety, time management, external appearance, and functionality. Our results show that the winning price in the auction does not affect the quality of the work. We discuss several reasons behind this finding.

Keywords: First-price auction; Minimum price; Performance evaluation score; Procurement (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0922142522000196
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:japwor:v:62:y:2022:i:c:s0922142522000196

DOI: 10.1016/j.japwor.2022.101134

Access Statistics for this article

Japan and the World Economy is currently edited by Robert Dekle and Yasushi Hamao

More articles in Japan and the World Economy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().