| dc.description.abstract | Cost escalation is a subject of great impact on long term defence planning, and estimating a cost escalation factor for
future cost modelling is therefore important. The historically observed cost escalation is an important input when
deciding on which cost escalation factor to base long term cost calculations on. This report studies the historical
operating cost escalation of equipment for the period 1994–2002.
This report offers an updated and improved method for estimating historical equipment operating cost escalation, by
adjusting the cost figures according to the levels of activity. We use different activity indicators for the different
services; flight hours for the Air Force and other aerial branches, sailing hours for the Navy, sailing distance for the
Coast Guard and exercise days for the Army. Operating costs for the joint institutions, the Home Guard and operations
abroad are not adjusted for activity level.
The updated method shows that historical equipment operating cost escalation has been about 3,75 % per year above
inflation in the period 1994–2002. These numbers are higher than previously estimated figures, though not surprising,
considering the activity level adjustment. | en_GB |