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How (In)accurate are demand forecasts in public works projects?”
- Journal of the American
, 2005
"... 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 US$59 billion. The study shows with very high statistical signi ..."
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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 US$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. The result is substantial downside financial and economic risks. Such risks are typically ignored or downplayed by planners and decision makers, to the detriment of social and economic welfare. For nine out of ten rail projects passenger forecasts are overestimated; average overestimation is 106 percent. This results in large benefit shortfalls for rail projects. For half of all road projects the difference between actual and forecasted traffic is more than ±20 percent. Forecasts have not become more accurate over the 30-year period studied. If techniques and skills for arriving at accurate demand forecasts have improved over time, as often claimed by forecasters, this does not show in the data. 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. The article shows how planners may help achieve this.
Ethical Challenges and Professional Responses of Travel Demand Forecasters by
"... Thirty years ago scholars first presented convincing evidence that local officials use biased travel demand forecasts to justify decisions based on unstated considerations. Since then, a number of researchers have demonstrated convincingly that such forecasts are systematically optimistic–often wild ..."
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Thirty years ago scholars first presented convincing evidence that local officials use biased travel demand forecasts to justify decisions based on unstated considerations. Since then, a number of researchers have demonstrated convincingly that such forecasts are systematically optimistic–often wildly so–for reasons that cannot be explained solely by the inherent difficulty of predicting the future. Why do modelers–professional engineers and planners who use quantitative techniques to predict future demand for travel and estimate its potential impact on built and proposed transportation facilities–generate biased forecasts and otherwise tolerate the misuse of their work? On initial consideration, it is tempting to surmise that corrupt modelers are responsible for biased forecasting. Indeed, corruption is the most common explanation of forecasting bias and tales of mercenary behavior are all too common in the field. Data from in-depth interviews with twenty-nine travel demand forecasters throughout the United States and Canada, how-1 ever, suggest new and different ways to understand the suspect behavior of transportation planning professionals. Those most likely to introduce bias and invite misuse of travel forecasts assume
