CONCEPT

Reference Class Forecasting

The methodology — developed by Flyvbjerg and adopted as UK government policy — that corrects planning forecasts by forcing the planner to compare the current project against the statistical distribution of outcomes for the reference class of structurally similar completed projects.

Reference class forecasting is Flyvbjerg's operational remedy for the planning fallacy. The method is simple in structure and extraordinarily effective in practice. Rather than relying on the planner's inside view — the detailed, optimistic narrative of why this particular project will succeed — the forecaster identifies a reference class of structurally similar completed projects and calibrates the current forecast against the empirical distribution of their outcomes. The method works because it replaces the optimism-producing cognitive mode with the outside view: the statistical reality of what actually happened when comparable projects were attempted. The UK government adopted it as official policy for infrastructure appraisal in 2003, and it has since influenced planning practice across dozens of countries.

In The You On AI Field Guide

The intellectual lineage runs through Kahneman and Tversky's distinction between inside and outside views. The inside view is narrative, specific, intuitive; it is the mode in which planners naturally operate and the

In The You On AI Field Guide

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