Derailing the Boondoggle
An article appears in the magazine Miller-McCune by Ryan Blitstein Derailing the Boondoggle, which discusses Bent Flybjerg, reference-class forecasting, and the trouble with mega-projects.
Clearly engineering based estimates of project costs built up cubic yard by cubic yard ought to be compared with economic-based estimates of the costs of the same project using comparable cases. Similarly for demand forecasts. Ideally the two methods (economic and engineering) would be the same, or close. Practice indicates otherwise.
One wonders whether estimates showing benefits < costs would actually derail many of these projects. Hiawatha LRT in Minnesota had a published B/C ratio of 0.42 and went forward and is now heralded (politically) as a success. Whether the B/C would actually exceed 1.0 is a class project for my transportation economics class this Fall.
Nevertheless, not all forecasts are high. In the Twin Cities, our study "Post-Construction Evaluation of Traffic Forecast Accuracy" show they tended to underestimate traffic.