Error and Optimism Bias in Toll Road Traffic Forecasts

Private sector investors use traffic forecasts to gauge the potential profitability of candidate toll road projects. This paper reports results from the largest study of toll road forecasting performance ever conducted. The author had access to commercial-in-confidence documentation released to project financiers and, over a 4-year period, compiled a database of predicted and actual traffic usage for over 100 international, privately financed toll road projects. The findings suggest that toll road traffic forecasts are characterized by large errors and considerable optimism bias. Potential investors need to be aware of this considerable potential for error and bias. Transaction structures should retain sufficient flexibility and liquidity to accommodate the possibility that actual traffic will differ from forecasted expectations.


  • English

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  • Accession Number: 01144698
  • Record Type: Publication
  • Files: TRIS, ATRI
  • Created Date: Oct 29 2009 4:07PM