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...

Despite the hundreds of billions of dollars being spent on infrastructure development — from roads, rail and airports to energy extraction and power networks to the Internet — surprisingly little reliable knowledge exists about the performance of these investments in terms of actual costs,...

In terms of risk, many appraisals of very large infrastructure investments assume, or pretend to assume, that infrastructure policies and projects exist in a predictable Newtonian world of cause and effect where things go according to plan. In reality, the world of policy and project preparation...

Pervasive misinformation about the costs, benefits and risks involved is a big problem in major project development. Consequences of misinformation are cost overruns, benefit shortfalls and waste. This chapter identifies optimism bias and strategic misrepresentation as main causes of...

Despite the enormous sums of money being spent on transportation infrastructure, surprisingly little systematic knowledge exists about the costs, benefits and risks involved. The literature lacks statistically valid answers to the central and self-evident question of whether transportation...

The American Planning Association recently endorsed a new forecasting method called reference class forecasting, which is based on theories of planning and decision-making that won the 2002 Nobel prize in economics. This paper details the method and describes the first instance of reference...