Underestimating Costs in Public Works Projects: Error or Lie?
Flyvbjerg, Holm and Buhl report what they describe as the first statistically significant study of cost escalation in transportation infrastructure projects, covering a sample of 258 projects across types, regions and periods. They find that the cost estimates used to decide whether projects should be built are systematically too low, and conclude that the underestimation is best explained by strategic misrepresentation and not by error. They advise that cost estimates produced by project promoters should not be trusted without scrutiny.
Flyvbjerg, Holm and Buhl report what they describe as the first statistically significant study of cost escalation in transportation infrastructure projects, covering a sample of 258 projects across types, regions and periods. They find that the cost estimates used to decide whether projects should be built are systematically too low, and conclude that the underestimation is best explained by strategic misrepresentation and not by error. They advise that cost estimates produced by project promoters should not be trusted without scrutiny.
Written from the abstract read 2026-10-25 via OpenAlex.
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Flyvbjerg, B., Holm, M. K. S., & Buhl, S. L. (2002). Underestimating costs in public works projects: Error or lie? Journal of the American Planning Association, 68(3), 279-295. doi:10.1080/01944360208976273