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Underestimating Costs in Public Works Projects: Error or Lie?

Underestimating Costs in Public Works Projects: Error or Lie? 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. Underestimation cannot be explained by error and is best explained by strategic misrepresentation, that is, lying. The policy implications are clear: legislators, administrators, investors, media representatives, and members of the public who value honest numbers should not trust cost estimates and cost-benefit analyses produced by project promoters and their analysts. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of the American Planning Association Taylor & Francis

Underestimating Costs in Public Works Projects: Error or Lie?

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References (50)

Publisher
Taylor & Francis
Copyright
Copyright Taylor & Francis Group, LLC
ISSN
1939-0130
eISSN
0194-4363
DOI
10.1080/01944360208976273
Publisher site
See Article on Publisher Site

Abstract

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. Underestimation cannot be explained by error and is best explained by strategic misrepresentation, that is, lying. The policy implications are clear: legislators, administrators, investors, media representatives, and members of the public who value honest numbers should not trust cost estimates and cost-benefit analyses produced by project promoters and their analysts.

Journal

Journal of the American Planning AssociationTaylor & Francis

Published: Sep 30, 2002

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