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.