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Optimism bias in appraisal

Optimism Bias is the term used to describe the demonstrated, systematic tendency for project appraisers to be overly optimistic about project costs, duration and benefits. The Treasury's Supplementary Guidance on Optimism Bias  recommends that project appraisers should make explicit adjustments to the estimates of project costs, benefits and duration based on empirical data to inform project decisions. This guidance helps appraisers to do this.

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