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.
Belongs to
Inception & Development
Argued in full
The largest contributor to optimism bias is the document that starts the project