How (In)accurate Are Demand Forecasts in Public Works Projects?: The Case of Transportation

By Bent Flyvbjerg, Mette K. Skamris holm, Søren L. Buhl. 2005

803 citations recorded by the source corpus.

Abstract 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 significance that forecasters generally do a poor job of estimating the demand for transportation infrastructure projects. For 9 out of 10 rail projects, passenger forecasts are overestimated; the average overestima-tion is 106%. For half of all road projects, the difference between actual and forecasted traffic is more than ±20%. The result is substantial financial risks, which are typically ignored or downplayed by planners and decision makers to the detriment of social and economic welfare. Our data also show that forecasts have not become more accurate over the 30-year period studied, despite claims to the contrary by forecasters. The causes of inaccuracy in forecasts are different for rail and road projects, with political causes playing a larger role for rail than for road. The cure is transparency, accountability, and new forecasting methods. The challenge is to change the governance structures for forecasting and project development. Our article shows how planners may help achieve this. This article was substantially reproduced in the article "Inaccuracy in Traffic Forecasts", published in 2006 in Transport Reviews [Bent Flyvbjerg, Mette Skamris Holm, and Søren L. Buhl, Transport Reviews, Vol. 26, Issue 1, 2006, pp. 1–24 (retracted)] and is the subject of a Notice of Redundant Publication in Journal of the American Planning Association, Vol. 78, Issue 3, page 352, 2012. doi:http://dx.doi.org/10.1080/01944363.2012.719432

Subfields: Transportation

View Paper: https://www.semanticscholar.org/paper/0d761c6d9cdff9a472ce3949f129dc54aa029510

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In Transportation

1. F. Dobruszkes
2. M. Givoni
3. Bent Flyvbjerg

Citations in the corpus

• What you Should Know about Megaprojects and Why: An Overview (2014, background): “The degree of misinformation varies significantly from project to project, as documented by the large standard deviations that apply to cost overruns and benefit shortfalls (Flyvbjerg et al., 2002; 2005).”
• Measuring Inaccuracy in Travel Demand Forecasting: Methodological Considerations Regarding Ramp Up and Sampling (2005, background): “As mentioned previously, the study of demand forecasts in 210 transportation infrastructure projects reported in Flyvbjerg et al. (2005) is the first survey sufficiently large to permit statistically valid answers to questions regarding the accuracy of travel demand forecasts.”
• Should We Build More Large Dams? The Actual Costs of Hydropower Megaproject Development (2014, background): “Second, optimistic judgments are often exacerbated by deception, i.e. strategic misrepresentation by project promoters (Wachs, 1989; Pickrell, 1992; Flyvbjerg et al., 2002, 2005, 2009).”
• Policy and Planning for Large-Infrastructure Projects: Problems, Causes, Cures (2005, neutral): “Political-economic explanations have been set forth by Flyvbjerg et al (2002; 2005) and Wachs (1989; 1990).”
• Large Infrastructure Projects: A Review of the Quality of Demand Forecasts and Cost Estimations (2007, neutral): “Flyvbjerg et al (2005) also conclude that for rail projects strategic behaviour is the main reason for overestimations of demand.”
• From Nobel Prize to Project Management: Getting Risks Right (2006, background): “Explanations in terms of strategic misrepresentation have been set forth by Wachs (1989; 1990) and Flyvbjerg, Holm, and Buhl (2002; 2005).”
• Cost Overruns and Demand Shortfalls in Urban Rail and Other Infrastructure (2007, methodology): “The labor with developing such checks and balances has been begun elsewhere (Bruzilius et al., 1998; Flyvbjerg et al., 2002, 2003, 2005; Flyvbjerg & COWI, 2004).”
• Curbing Optimism Bias and Strategic Misrepresentation in Planning: Reference Class Forecasting in Practice (2008, methodology): “Inaccuracy in cost forecasts for rail, bridges, tunnels, and roads, respectively (construction costs, constant prices).”