A major source of risk in project management is inaccurate forecasts of project costs, demand, and other impacts. The paper presents a promising new approach to mitigating such risk based on theories of decision-making under uncertainty, which won the 2002 Nobel Prize in economics. First, the...

This article examines five common misunderstandings about case-study research: (a) theoretical knowledge is more valuable than practical knowledge; (b) one cannot generalize from a single case, therefore, the single-case study cannot contribute to scientific development; (c) the case study is...

This paper presents results from the first statistically significant study of traffic forecasts in transportation infrastructure projects. The sample used is the largest of its kind, covering 210 projects in 14 nations worth US$58 billion. The study shows with very high statistical significance...

The Summer 2005 issue of JAPA contains a letter from the President of the American Public Transportation Association, William Millar, regarding our article “How (In)accurate Are Demand Forecasts in Public Works Projects? The Case of Transportation,” printed in the Spring issue. We concluded...

Project promoters, forecasters, and managers sometimes object to two things in measuring inaccuracy in travel demand forecasting: (1) using the forecast made at the time of making the decision to build as the basis for measuring inaccuracy and (2) using traffic during the first year of...

This article presents results from the first statistically significant study of traffic forecasts in transportation infrastructure projects. The sample used is the largest of its kind, covering 210 projects in 14 nations worth U.S.$59 billion. The study shows with very high statistical...

Some argue that almost no projects, including our most treasured ones, would ever be undertaken if some form of deception about costs and benefits weren‘t involved. The Brooklyn Bridge, for instance, had a cost overrun of 100%, the Sydney Opera House of 1,400%. Had the true costs been known,...

Some years ago I was threatened by a high-ranking government official as I was beginning research on cost overrun in large public works projects. The official told me in no uncertain terms that if I came up with results that reflected badly on his government and its projects he would personally...

Results from the first statistically significant study of the causes of cost escalation in transport infrastructure projects are presented. The study is based on a sample of 258 rail, bridge, tunnel and road projects worth US$90 billion. The focus is on the dependence of cost escalation on: (1)...

Dan Lovallo and Daniel Kahneman must be commended for their clear identification of causes and cures to the planning fallacy in, “Delusions of Success: How Optimism Undermines Executives’ Decisions” (July 2003). Their look at overoptimism, anchoring, competitor neglect, and the outside...