AI1128 Economics of the Built Environment 7.5 credits

The course covers the following areas:

1. Microeconomics: price formation on competitive markets and monopoly markets, different regulations and their effects with a special focus on the housing market and a sustainable society. The basis of contract theory with applications to procurement contracts.

2. Macroeconomics with a focus on property cycles and how these are related to the general business cycle and macroeconomic policies.

3. Cost calculations, investment calculations and how these can be used for analysis of projects and valuation of properties.

4. The core of an annual report, e.g., balance sheet and income statement.

After the course the student should be able to:

• present the principles behind how a market works
• analyze the effects from various changes on a market on prices and quantities produced
• understand the background of market failures and their implications
• explain how economic policy instruments may be used to achieve a sustainable society
• understand why certain macroeconomic policies are introduced, e.g. when the central bank changes the interest rate
• evaluate the general effects of different macroeconomic changes on the real estate and construction market
• explain the basic fundamentals behind cost- / benefit-analysis
• interpret the annual financial statements

No prerequisites

Allowed during the exam: a calculator and a Swedish dictionary.

- Perloff, J. M. (2021). Microeconomics: Theory and applications with calculus (5th ed.).

Harlow, Essex: Pearson Education Limited.

- Compendium of Articles (pdf format)

Some minor changes might to be made. In case of changes being made, these will be

announced at least four weeks before the course starts.

If the course is discontinued, students may request to be examined during the following two academic years.

• TENB - Written exam, 7.5 credits, grading scale: A, B, C, D, E, FX, F

Based on recommendation from KTH’s coordinator for disabilities, the examiner will decide how to adapt an examination for students with documented disability.

The examiner may apply another examination format when re-examining individual students.

Mats Wilhelmsson

• All members of a group are responsible for the group's work.
• In any assessment, every student shall honestly disclose any help received and sources used.
• In an oral assessment, every student shall be able to present and answer questions about the entire assignment and solution.