A construction project cash flow model: an idiographic approach

The paper introduces and supports the contention that an idiographic methodology is appropriate to the posthoc study and interpretation of individual construction project cashflows. A cash flow model based on the logit transformation is proposed to be consistent with this methodology. The model is based on historical data, and yields two parameters to describe each individual project. The model is tested using two samples totalling 72 projects. Goodness of fit for the model, using a measure of standard deviation from 1.0% to 4.6%, with a median of 2.5%, is found for individual projects. The experimental hypothesis (that there is substantial variation between projects) is supported by the graphical and statistical evidence of deviation, which is argued to be the result of the individual ontology of each project - systematic error - rather than random error from an ideal. The paper concludes that forecasts of individual cash flows are invalid when derived from analysis of grouped data.