Reference class forecasting
Building an estimate from the recorded outcomes of a class of comparable completed projects, rather than from a bottom-up view of the project in front of you.
The method treats the project as one member of a group whose actual outcomes are known, and takes the distribution of those outcomes as the starting point. It is the generalised form of the move HM Treasury makes when it publishes optimism bias uplifts by project type.
The Green Book asks appraisers to consider whether similar interventions have previously been evaluated and to use that evidence where relevant, which is the same instruction expressed as guidance rather than as a technique.
Sources
Bent Flyvbjerg, What You Should Know About Megaprojects, and Why, An Overview, and Introduction, The Iron Law of Megaproject Management. HM Treasury, Supplementary Green Book Guidance, Optimism Bias, and The Green Book, 2026 edition, paragraph 2.9 on using prior evaluation evidence.
Read the sources
- Flyvbjerg, What You Should Know About Megaprojects, and Why
read 2026-08-20. - HM Treasury, Supplementary Green Book Guidance, Optimism Bias
published on gov.uk 21 April 2013, no later revision; evidence base 2002; read 2026-09-05. Free, 15 pages. Table 1 gives upper and lower bound uplifts for capital expenditure and works duration by project type; Tables 2 to 4 give contributory factors. Evidence base is Mott MacDonald 2002; the Green Book 2026 (6.81) ranks these generic values below an organisation’s own forecast-error data. Read in full 5 September 2026. - HM Treasury, The Green Book, 2026 edition
2026 edition, published 5 February 2026; read 2026-09-05.