Underestimating Costs in Public Works Projects: Error or Lie?

@article{Flyvbjerg2002UnderestimatingCI,
  title={Underestimating Costs in Public Works Projects: Error or Lie?},
  author={Bent Flyvbjerg and Mette K. Skamris Holm and S{\o}ren L. Buhl},
  journal={Journal of the American Planning Association},
  year={2002},
  volume={68},
  pages={279 - 295}
}
Abstract This article presents results from the first statistically significant study of cost escalation in transportation infrastructure projects. Based on a sample of 258 transportation infrastructure projects worth US$90 billion and representing different project types, geographical regions, and historical periods, it is found with overwhelming statistical significance that the cost estimates used to decide whether such projects should be built are highly and systematically misleading… 
View on Taylor & Francis
arxiv.org
1,429 Citations
Highly Influential Citations
89
Background Citations
447
Methods Citations
48
Results Citations
32

1,429 Citations

Citation Type

Citation Type

Cost Overruns in Public Sector Investment Projects
We analyze cost overruns in a large sample of public infrastructural investment projects in Portugal. The average cost deviation relative to the budgeted costs amounts to 24%. The large projects even…
Survival of the Unfittest: Why the Worst Infrastructure Gets Built-And What We Can Do About it
The article first describes characteristics of major infrastructure projects. Second, it documents a much neglected topic in economics: that ex ante estimates of costs and benefits are often very…
Survival of the Un-fittest: Why the Worst Infrastructure Gets Built - and What We Can Do about It
The article first describes characteristics of major infrastructure projects. Second, it documents a much neglected topic in economics: that ex ante estimates of costs and benefits are often very…
Analysis of cost estimation disclosure in environmental impact statements for surface transportation projects
Reliability in cost estimates in publicly funded projects is more important today than ever with increased governmental funding to infrastructure projects and associated accountability requirements,…
What Causes Cost Overrun in Transport Infrastructure Projects?
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…
Exogenous determinants of cost deviations and overruns in local infrastructure projects
Abstract There is a significant concern about cost deviations and overruns in public projects, particularly by the local governments. The magnitude of expenditure on these infrastructure projects…
Cost overruns and demand shortfalls – Deception or selection?
From Nobel Prize to Project Management: Getting Risks Right
TLDR
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, and presents the first instance of practical reference class forecasting, which concerns cost forecasts for large transportation infrastructure projects.
Cost Estimates, Cost Overruns, and Project Continuation Decisions
ABSTRACT: Cost overruns on multi-period projects are large and frequent in natural environments. Reasons for these overruns include cost understatements in initial project proposals and escalation of…
Cost overruns in road construction--what are their sizes and determinants?
...
1
2
3
4
5
...

References

SHOWING 1-10 OF 80 REFERENCES
How Reliable are Estimates of Infrastructure Costs? A Comparative Analysis.
Although the economic importance of adequate infrastructure is generally recognised, in practice decision-makers - faced with the judgement of new large infrastructure projects - are hesitant to…
Cost overruns in public projects
Megaprojects and Risk. An Anatomy of Ambition
Back cover text: Megaprojects and Risk provides the first detailed examination of the phenomenon of megaprojects. It is a fascinating account of how the promoters of multibillion-dollar megaprojects…
Big decisions, big risks: improving accountability in mega projects
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…
Inaccuracy of traffic forecasts and cost estimates on large transport projects
Deception in Dallas: Strategic Misrepresentation in Rail Transit Promotion and Evaluation
Abstract This article describes the misuse of land-use and ridership forecasts by Dallas Area Rapid Transit (DART). DART made extensive use of clearly unrealistic land use forecasts and optimistic…
A Desire Named Streetcar Fantasy and Fact in Rail Transit Planning
Abstract The forecasts that led local officials in eight U.S. cities to advocate rail transit projects over competing, less capital-intensive options grossly overestimated rail transit ridership and…
Management trends for major projects
There seems to be a rapidly-developing public need for macro-engineering projects but also a growing disillusionment with cost overruns. The solution requires a new paradigm for the control of large…
POINT OF VIEW: URBAN RAIL TRANSIT SYSTEMS. LET'S MAKE FORECAST AND ACTUAL COMPARISONS FAIR
This article discusses why the Urban Mass Transportation Administration report "Urban Rail Transit Projects: Forecast Versus Actual Ridership and Costs" (1989) fails in its attempt to critique rail…
Forecasting: An Appraisal for Policy-Makers and Planners.
Energy needs...oil supplies...inflation rates...the demand for new homes...in concerns like these, forecasting plays a crucial role. Forecasts not only determine how billions of dollars will be spent…
...
1
2
3
4
5
...