Regional Highway Construction Cost Index Variation: Structural Disparities, Temporal Drivers, and Mechanistic Insights across the Pandemic Period

Comparing the highway construction cost index (HCCI) across different regions highlights how regional construction costs fluctuate differently over time, revealing regional disparities that statewide averages can mask. These regional differences influence cost projections, budget planning, and resource allocation, underscoring the need for tailored cost management strategies. While prior research has focused on statewide cost indices, limited attention has been given to regional disparities and their underlying drivers, leaving a gap in understanding cost variability and the differences in relative cost fluctuations over time at finer geographic scales. This research investigates regional disparities in HCCI from 2010 to 2023, using a data set that includes Michigan regional cost indices, economic indicators (e.g., unemployment and income), and construction activity metrics (e.g., bidder counts and awarded amounts). The Friedman test confirmed significant heterogeneity across regions (χ2=45.231, p<0.001). Pairwise Wilcoxon tests (Holm-adjusted p=0.041) showed that the North and University regions differ significantly from the statewide Michigan HCCI, while North also diverges from Grand, Bay, and Southwest. Causality analysis revealed region-specific drivers: for example, in Metro, fluctuations are associated with income (ρ=0.94) and unemployment (ρ=−0.60; Granger p=0.02), while in North, bidder competition is a strong negative driver (ρ=−0.67, p=0.01). Regional disparities widened during the pandemic period (2020–2021) and further intensified in the early post-pandemic recovery period (2022–2023), with high-escalation regions diverging further from the statewide index. This research contributes by introducing a structural–temporal analytical framework that identifies and explains regional disparities in HCCI, yielding actionable insights and mechanism-based understanding of region-specific cost dynamics and management. Although this research is grounded in Michigan, the methodological framework can be adapted to other states or countries to improve region-specific cost management and budgeting practices.