How to improve the calibration of cost models

One of software engineering's long-standing problems is to estimate the cost of a software project. Using the volume or size of a program to estimate the cost is a common practice in many software development organizations. However, in many situations one is unable to observe the value of this variable at the beginning of the project; one has to estimate it. In this paper we introduce a fairly general model which permits a surrogate or a proxy variable to be observed instead of the actual size. Under this model we obtain estimation of software cost at the given value of a surrogate variable. A confidence interval is also provided under this model.