Cost Indices and Parametric Estimating - Theory & Concepts - Cost Index

Learn how to use historical data, cost indices, and parametric models to generate preliminary estimates quickly and accurately.

Adjust historical project costs to current values using cost indices.

Historical Cost ($)

$1,500,000

Historical Index (e.g., Year 2010)

4500

Current Index (e.g., Year 2024)

8100

Index Multiplier

1.800x

Estimated Current Cost

$2,700,000

\text{Formula: } 1,500,000 \times \left(\frac{8100}{4500}\right)

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