Demand Forecasting Errors


Transport demand forecasts form a key input to the economic appraisal of transport projects. As such any errors present within the demand forecasts will undermine the reliability of the economic appraisal. The minimisation of demand forecasting errors is therefore important in the delivery of a robust appraisal.

In this note we address this issue by introducing the key issues and error types present within demand forecasts (Section 1). Following that introductory section the error types are described in more detail: measurement error (Section 2), model specification error (Section 3) and External or Exogenous Errors (Section 4). The final section presents a discussion on how to manage demand forecasting errors (Section 5).


World Bank, Washington D.C., USA. Transport Note No. TRN-12, 8 pp.

Demand Forecasting Errors

Published 1 January 2005