this hypothesis more specifically is to correlate deviations in prices with deviations in quantities with an OLS regression as follows, ，
where ¨p is defined in eq. 1, ¨q is defined in eq.2 and μ is the error term. However, no significant correlation is found between these variables.
Finally, project specific variables such as firm, geographical placement of project, type of road, project time,length of road and year of project start were included. None of the variables were significant.Hence, in trying to find correlation between deviations in p and deviations in q this dataset fails. Despite running several OLS with control variables, no significant relationship could be found.
5、Conclusion
There is a consensus among experts in the construction industry that unbalanced bidding is a huge problem. This is mainly based on anecdotal evidence. There is a lack of empirical studies using larger datasets and statistical analysis to approach this concept. Bajari et al (2014) conclude that that unbalanced bidding is not a major determinant in preparing bids. As the first Swedish study based on quantitative analysis, the problem of unbalanced bidding cannot be found regarding road construction. Important control variables have been included but no significant correlation can be found between deviations in unit prices and deviations in quantities. Reasons for the lack of empirical support for unbalanced bidding can be several. A potential explanation is that the contractors do not have more information that the client. This is the underlying assumption for skewing bids, which might not be fulfilled. Another explanation is the transaction cost for preparing skew bids. It might take a long time for the calculator to go through all quantities and find misestimating. This cost may extend the expected profit of skewing. Also the risk of skewing bids are larger than what the contractor is willing to bare.
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