INFRASTRUCTURE: INTEGRATED ISSUE OR TOWER OF BABEL?

In a housing market model, the supply of housing, particularly new houses, is usually treated in a very cursory fashion, with new housing being regarded as homogeneously good and building cost function defined as a function of capital and labor costs. This paper formally recognizes heterogeneity in a housing model and introduces engineering design parameters in building cost function. Using structural engineering concepts, an engineering cost function is derived in terms of design parameters. A multiobjective compromise optimization algorithm is suggested to choose from various building cost functions. An empirical application of this method is demonstrated by solving the production function of a modular room 3.5 m * 3.5 m in area and 3.14 m in height.