January is a time for reflection and planning.  It seems that we have a  new sheet, a new year and a blank canvas.  We can in a sense leave the past behind us.  This year will be new and different – definitely much better than last year.  We can have a notion to make this year our best year yet.  That is certainly my own intention as I start on my annual journey and as our planet continues on it’s journey around the sun.  When planning our year ahead however it is important to be aware of a judgement bias called the planning fallacy.

“The planning fallacy is a phenomenon in which predictions about how much time will be needed to complete a future task display an optimism bias and underestimate the time needed.”

-Daniel Kahneman and Amos Tversky, 1979

This phenomenon occurs regardless of the individual’s knowledge that past tasks of a similar nature have taken longer to complete than generally planned.  The bias only affects predictions about one’s own tasks; when outside observers predict task completion times, they show a pessimistic bias, overestimating the time needed.

Management books even recognize the highly pervasive effects of time underestimation: the “laws of project management” state, “A carelessly planned project will take three times longer to complete than expected; a carefully planned project will take only twice as long (Pfleeger, 1991, p. 41).

One famous example of the planning fallacy is the construction of the Sydney Opera House, where construction lasted 6 years longer than predicted, at a cost almost $100 million over budget (Hall, 1980).  Another example is the construction of the channel tunnel (Chunnel) to connect London and Paris which was finally completed in May of 1994, even though initial estimates planned on it being completed in June 1993. The cost rose to over 10 million pounds, immensely more than the estimated 4.9 million pounds.

I have come across the Planning Fallacy many times in my own life.  Completing my PhD is an example.  At the start I expected it to take three years, when in fact it took me six years to complete, and was much much harder than I expected.  I even wrote a book about my experiences of doing my PhD to help others following after me.   A study by Buehler, Griffin, and Ross (1994) shows that I am not the only one who gets it wrong when predicting academic completion dates.  In this study, a class of students was asked to estimate the date at which they would finish their thesis. They actually completed their thesis, on average, in 56 days. However, they predicted they would complete their thesis in 34 days. Indeed, even when asked when they might complete their thesis if “everything went as well as it possibly could”, the mean response was still 49 days.

Another example which I have from my own life is buying a new home and moving house. It took me two years longer than I had expected at the outset of the project.  I simply could not predict all the challenges that  would occur ahead of time which slowed me down immensely.  Another example of the planning fallacy comes from Daniel Kahneman’s recent book,