The research project of which the present study is the end result was initiated in late 1970, while I was affiliated with the Economisch Instituut voor de Bouwnijverheid (Economic Institute for the Construction Indus try), Amsterdam, the Netherlands. This institution, in association with the Urban Development Authority, Kuala Lumpur, Malaysia, also suppor ted fieldwork in Malaysia from early 1973 to spring 1975. This resulted in a report to the Malaysian government (Wegelin, 1975), which forms the basis of the present study. Improvement and extension of the earlier report to mould the study in its present shape has been made possible by the financial support of the Stichting Wetenschappelijk Onderwijs in Econo mische en Sociale Aspecten van Bouwproductie en Bouwnijverheid (Foun dation for University Education in Economic and Social Aspects of Construction), Amsterdam, the Netherlands. The support of the above institutions is gratefully acknowledged. The study owes much to the pioneering work on low-income housing in developing countries bij Charles Abrams and has further been stimul ated particularly by the contributions of Leland S. Bums and John F.C. Turner in this field. The recent development of comprehensive cost benefit appraisal methods for industrial projects in developing countries by Professor I.M.D. Little and J.A. Mirrlees (OECD) and A.K. Sen, P. Dasgupta and S.A. Marglin (UNIDO) provided a challenge to apply similar methods in the area of low-income housing.