Abstract
| Original language | English |
|---|---|
| Journal | Financial Accountability and Management |
| Volume | 35 |
| Issue number | 4 |
| Pages (from-to) | 337-352 |
| Number of pages | 16 |
| ISSN | 0267-4424 |
| DOIs | |
| Publication status | Published - Nov 2019 |
Bibliographical note
Published online: 1 July, 2019Keywords
- Actor–Network Theory
- Megaproject
- Project cost estimation
- Public budgeting
- Reference class forecasting
Cite this
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The Processes of Public Megaproject Cost Estimation : The Inaccuracy of Reference Class Forecasting. / Neerup Themsen, Tim .
In: Financial Accountability and Management, Vol. 35, No. 4, 11.2019, p. 337-352.Research output: Contribution to journal › Journal article › Research › peer-review
TY - JOUR
T1 - The Processes of Public Megaproject Cost Estimation
T2 - The Inaccuracy of Reference Class Forecasting
AU - Neerup Themsen, Tim
N1 - Published online: 1 July, 2019
PY - 2019/11
Y1 - 2019/11
N2 - Governments worldwide are introducing “reference class forecasting” to improve the accuracy of megaproject cost estimation and thus ultimately the ability to deliver megaprojects on budget without altering the project specifications and/or changing the time schedule. In contrast to current findings, which show that reference class forecasting leads to more accurate project cost estimates by counteracting human cognitive and organizational biases, this article indicates the contrary, that reference class forecasting does not lead to more accurate cost estimates. The article theorizes that reference class forecasting fails to produce more accurate project cost estimates because estimates are always a relational network effect of human and nonhuman actors’ “biased” efforts to establish them. This finding challenges the existing literature by pointing to a more complex understanding of project cost estimation and biases. The finding is based on a longitudinal case study of a 23.6-billion-kroner Danish public megaproject, which failed to meet its objectives despite the application of reference class forecasting.
AB - Governments worldwide are introducing “reference class forecasting” to improve the accuracy of megaproject cost estimation and thus ultimately the ability to deliver megaprojects on budget without altering the project specifications and/or changing the time schedule. In contrast to current findings, which show that reference class forecasting leads to more accurate project cost estimates by counteracting human cognitive and organizational biases, this article indicates the contrary, that reference class forecasting does not lead to more accurate cost estimates. The article theorizes that reference class forecasting fails to produce more accurate project cost estimates because estimates are always a relational network effect of human and nonhuman actors’ “biased” efforts to establish them. This finding challenges the existing literature by pointing to a more complex understanding of project cost estimation and biases. The finding is based on a longitudinal case study of a 23.6-billion-kroner Danish public megaproject, which failed to meet its objectives despite the application of reference class forecasting.
KW - Actor–Network Theory
KW - Megaproject
KW - Project cost estimation
KW - Public budgeting
KW - Reference class forecasting
KW - Actor–network theory
KW - Megaproject
KW - Project cost estimation
KW - Public budgeting
KW - Reference class forecasting
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U2 - 10.1111/faam.12210
DO - 10.1111/faam.12210
M3 - Journal article
AN - SCOPUS:85068484627
VL - 35
SP - 337
EP - 352
JO - Financial Accountability & Management
JF - Financial Accountability & Management
SN - 0267-4424
IS - 4
ER -