Economic performance of architectural firms: an application of production theory

Sturgeon, Douglas

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Description

Title

Economic performance of architectural firms: an application of production theory

Author(s)

Sturgeon, Douglas

Issue Date

2013-02-03T19:36:34Z

Director of Research (if dissertation) or Advisor (if thesis)

Strand, Richard K.

Doctoral Committee Chair(s)

Strand, Richard K.

Committee Member(s)

• Andrejasich, Michael J.
• McCulley, Michael T.
• Petruzzi, Nicholas C.

Department of Study

Architecture

Discipline

Architecture

Degree Granting Institution

University of Illinois at Urbana-Champaign

Degree Name

Ph.D.

Degree Level

Dissertation

Keyword(s)

• Architecture
• Economics
• Production Theory
• Production Function

Abstract

This dissertation explores the application of production theory to architectural firms. The basis of production theory, upon which all else depends and emerges from, is the production function. The production function is simultaneously a mathematical representation of the arrangements of inputs necessary to the production of goods and services of a firm, and a conceptualization of the underlying production process. The key benefit of understanding and utilizing production functions stems from its centrality in cost minimizing and output maximizing techniques. Through the adoption of these optimization techniques architectural firms are afforded the means of improving their economic performance. In this dissertation the focus is upon the identification of the n-input single-output production function best suitable for empirical study of architecture firms and subsequent use in minimizing costs and maximizing output as pathways to improving economic performance. The maturation of production theory is largely a 20th century phenomena although its antecedents date from the 18th century. The historical development of production theory begins with Jacques Turgot and is advanced by such luminaries as Johann Heinreich von Thunen, Antoine Augustin Cournot, Herman Heinrich Gossen, William Stanley Jevons, John Bates Clark, and John Gustav Knut Wicksell among many others. The early historical period is brought to an end and the contemporary period born with the publication of A Theory of Production by Charles Cobb and Paul Douglas in which the production function bearing their names first appears. This dissertation provides a brief history of the early period and a more detailed account of the development of production functions, of the n-input single-output variety, as it played out in the balance of the 20th century. In the process, over 50 production functions and their variations are identified and characterized. A winnowing process was developed and applied that reduced this list to five candidate production functions. An abbreviated case study performed a statistical examination each of these forms concluding that the Cobb-Douglas and Leontief production functions presented the most viable choices for empirical study of architectural firms.

Graduation Semester

2012-12

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Copyright and License Information

Copyright 2012 Douglas Eugene Sturgeon

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