Transport Policy 27 (2013) 102–111

Contents lists available at SciVerse ScienceDirect

Transport Policy
journal homepage: www.elsevier.com/locate/tranpol

How accurate are national road traffic growth-rate forecasts?—The case

of Norway
James Odeck a,b,n
a
Department of Economics, Molde University College, Molde, Norway
b
Department of Civil and Transport Engineering, The Norwegian University of Science and Technology, N-7491 Trondheim, Norway

a r t i c l e i n f o a b s t r a c t

Available online 6 March 2013 This paper evaluates the accuracy of the annual national road traffic growth-rate forecasts that are
Keywords: prepared by the Norwegian road authorities. The rationale for the study is the fact that national and
Annual national/regional road traffic regional traffic growth-rate forecasts are the basis for policy formation, and inaccurate forecasts may
growth-rate forecasts lead to inappropriate policies. The data correspond to the period of 1996–2008 whereas the forecasting
Inaccuracy models were revised in 2001. The results reveal the following: (1) traffic growth-rate forecasts were
Unbiased estimates more inaccurate in the period before the revision as compared to the period after the revision and
Efficiency underestimation is most common; (2) the naı̈ve growth-rate forecasts perform better than the official
Norway forecasts, but GDP growth-rate forecasts perform worse than the official forecasts; (3) the growth-rate
forecasts are unbiased and efficient at the national level, but there are variations among regions and
time periods. Overall, the Norwegian growth-rate forecast appears to perform fairly well in the short
run, but the small inaccuracies that were observed may cause a problem in the long run, particularly in
relation to the evaluation of the long-term effects of investments. We therefore advice that models
need to be continually revised to accommodate more recent data such as international traffic and
immigration which seem to greatly impact on the accuracy of models.
& 2012 Elsevier Ltd. All rights reserved.

1. Introduction
National and regional traffic growth-rate forecasts are of
interest to the general public, to decision makers and to scholars
for obvious reasons; growth-rate forecasts are an important basis
for policy making; so inaccurate forecasts are likely to lead to
unsound policies that may entail an inappropriate use of
resources. As a matter of fact, there has been an ongoing debate
in the literature regarding the consequences of underestimated
traffic forecasts for policy outcomes at the project-specific level.
Previous studies on the subject (e.g., Kjerkreit and Odeck, 2009;
Welde and Odeck, 2011; Flyvbjerg, 2005) have found that traffic
forecasts among roads projects are inaccurate and are generally
underestimated. Until now, however, the literature of transporta-
tion policy has not provided a thorough statistical analysis that
evaluates the extent of the inaccuracy, bias or inefficiency in the
national and regional road traffic growth-rate forecasts. An
inaccurate forecast is one that does not correspond closely
enough to actual outcomes; a biased forecast is one that is
systematically one-sided (i.e., it either overestimates or under-
estimates actual traffic outcomes); and an inefficient forecast is
n
Tel.: þ47 220 736 74; fax: þ47 220 736 73.
E-mail addresses: james.odeck@vegvesen.no, james.odeck@ntnu.no
one that does not adequately take into account the relevant
information that was known at the time when the forecast was
made (e.g., the previous year’s forecasts and personal and house-
hold income). The problem of inaccurate forecasts is pertinent not
only for traffic growth-rate forecasts but also for forecasts in other
sectors of the economy. In the macroeconomics literature, for
example, annual national and regional GDP and inflation forecasts
are constantly being scrutinized (see, for example, International
Journal of Forecasting).
The objective of this paper is to investigate the magnitudes of
the inaccuracies of traffic growth-rate forecasts at the national
and regional levels for Norway. Its major contribution to the
literature of transportation policy is that it is the first to scrutinize
the annual national and regional traffic growth-rate forecasts
using the succinct statistical/econometrical methods that are well
established in the literature of economic forecasting to investigate
the accuracy, bias, and efficiency of forecasts. In particular, the
paper addresses the following questions: (1) What is the magni-
tude of the inaccuracy that exists in the annual national and
regional traffic growth-rate forecasts in Norway?, (2) To what
extent are these forecasts biased?, (3) Did the revision of the
forecasting models after 2001 significantly reduce the magnitudes
of the inaccuracies?, (4) How does the forecasts that were made
by the Norwegian national road authorities compare to alterna-
tive forecasts? and, (5) Are the traffic growth-rate forecasts

0967-070X/$ - see front matter & 2012 Elsevier Ltd. All rights reserved.
http://dx.doi.org/10.1016/j.tranpol.2012.12.003
 J. Odeck / Transport Policy 27 (2013) 102–111
efficient in taking into account the actual traffic growth rates in
previous years and the growth rates of personal and household
income (provided that the GDP growth rate can be used as a
proxy for the growth rates of personal and household income)?
For reasons of clarity, when dealing with the inaccuracy of
national or regional traffic growth-rate forecasts, a distinction must
be made to readers between it and the so-called project-specific
traffic forecasts. The latter refers to the expected volume of traffic
at some future time if a project is built, whereas the former refers
to the percentage by which the traffic volume is expected to grow
at the national or regional level on all roads while taking all future
developments in the economy into account. It must however, be
noted that the traffic-growth rate at the project-specific level
must conform to the national/regional traffic-growth, i.e., if it is
higher or lower, explanations are given(see for instance,
Norwegian Public Roads Administration (2005). Another issue
worth pointing out when dealing with the inaccuracy of forecasts
in general is that one needs to be aware that there are certain
limits to how accurate any forecasts can be. there will always be
some discrepancies between forecasts and outcomes. Therefore,
the real problem is not determining whether discrepancies exist
at all, but rather it is quantifying the discrepancies to determine
whether they are statistically significant A preliminary approach
to aid in the process of making policy decisions when one realizes
that forecasts will rarely match outcomes precisely was proposed
by Granger (1996); forecasts should be supplemented with
confidence intervals such that policymakers are presented with
an indication of the uncertainty implicit in the forecasts. At the
present time traffic growth-rate forecasts in Norway, and in many
other countries, are presented as single-point estimates without
confidence intervals.
The rest of the paper is organized as follows. Section 2 is a
literature review. Section 3 describes the national traffic forecast
model for Norway and the revisions that were undertaken.
Section 4 describes the data used in the analyses. Section 5
presents the methodology that was used together with the results
that were obtained with respect to the five questions posed
above. Finally, Section 6 provides concluding remarks.
2. Literature review
The existing literature that deals with the inaccuracy of
national and regional traffic growth-rate forecasts in the trans-
portation sector is very sparse. One of the rare pieces of literature
dealing with these issues is a study that reviews national trans-
port models by considering the SAMPERS model that is used in
Sweden. In their review of the transport models that are used in
Swedish Planning Practice, Daniel Jonsson and Berglund (2011)
examined SAMPERS (the national model) and LuTrans (the regio-
nal model for Stockholm) in terms of their usefulness in planning
practices. Based on three case examples, the authors noted that
the effectiveness and efficiency of these models are the key to the
success of models as a support for decision making.
Despite the paucity of the literature, some reports do indicate
that the inaccuracies of project-specific forecasts are abundant
(see, for example, Parthasarathia and Levinson (2010) for a
thorough survey of this literature). In addition to providing a
thorough literature review, Parthasarathia and Levinson (2010)
evaluated the accuracy of traffic demand forecasts using a sample
of recently completed projects in Minnesota. Their results indi-
cate that roadway traffic forecasts often underestimate the actual
demand, and that factors such as highway type and functional
classification of highways have an influence on demand. It is not
necessary to repeat the findings of most other literature on
specific projects that deal with the inaccuracy of traffic forecasts
103
at the project level because the findings are discussed in
Parthasarathia and Levinson (2010). On the other hand, a study
that relates specifically to Norway that was not included in the
above-mentioned review of the literature is Kjerkreit and Odeck
(2009). In that study, nine road projects were examined and the
traffic forecasts relating to each project were compared to the
actual outcomes that were observed five years after the projects
were completed. Kjerkreit and Odeck (2009) found that under-
estimation of traffic growth rates was prevalent across all the
projects that were examined. Welde and Odeck (2011) also
studied the accuracy of traffic forecasts by comparing two types
of projects in the road sector, namely toll roads and non-toll
roads. Their results revealed that the forecasts for toll roads were
fairly accurate, but the forecasts underestimated the traffic
growth rate for non-toll roads.
The literature mentioned above regarding the accuracy of traffic
forecasts has shed important light on the magnitudes of over- or
over underestimation of traffic forecasts in the road sectors, and it
suggests that the analysts who prepare the forecasts should strive to
be more accurate to assist in the development of appropriate
policies. However, all these previous studies have been based on
under- or overestimation of traffic growth rates with respect to
specific projects rather than on the annual national or regional
forecasts. There are almost no studies that have examined bias (or
the absence of bias) or the (in) efficiency of national, regional and
even project-specific traffic growth-rate forecasts using succinct
econometric frameworks similar to those used in the studies that
are published in economic journals that deal with forecasting.
3. The national traffic forecast model for Norway and
the changes that occurred
The National Transport Model (NTM) that is used in Norway
for forecasting road traffic is built along the same lines as similar
transport models used in several other European countries (e.g.,
the NTM for the UK (see Department of Transport, U.K., 2011) and
SAMPERS for Sweden (see Algers and Beser, 2002)).
The Norwegian National Transport Model (NTM) uses a bottom-
up approach to estimate the number of trips people make. First, it
estimates the number of trips people make; second, it allocates
those trips to actual journeys made between specific origins and
destinations; third, it allocates those journeys to specific modes of
transport; and finally, it allocates the journeys being made via a
particular mode to specific routes across the transport network.
Most importantly, the NTM is used to forecast the number of future
trips subject to changes in inputs that are entered into the model.
For example, if some new roads are to be built, the resulting changes
will affect the model outcomes (e.g., in terms of travel cost, which
may, in turn, have an effect on how people travel.
The basic structure of the NTM is illustrated in Fig. 1. A model
run starts by producing the level of service matrices observed in the
network as shown at the lower left-hand part of the diagram. These
matrices contain information on travel times, distance and other
travel costs between zones for each region and for all modes of
transport. The level of service matrices is an input to the transport
demand model that estimates the mode/destination choice as shown
in the middle of the diagram. Other important inputs and determi-
nants of the demand model are data from travel surveys that maps
how people travel which is invariant to travel costs and demo-
graphic zonal data for generation of trips. The function of the
demand model (mode/destination choice) is to use inputs from the
level of service matrices and data from travel surveys (e.g., data on
how the generalized travel costs affect specific travel costs) to
determine how the final trips would be distributed among specific
origins, destinations and modes by which they are made. Next, data
104 J. Odeck / Transport Policy 27 (2013) 102–111
Fig. 1. The framework of the Norwegian transport model (NTM).
on car ownership and population are joined together with informa-
tion generated by the mode choice model to produce a schedule of
trip generations by age groups. Once the schedule of trip generations
is established, trip matrices by errands are calculated. The trips
produced in this way are then distributed to the network through
the network model according to travel purposes as shown on the
lowermost right hand side of the figure.
Given this overview of the NTM, it is evident that the NTM can
be used to forecast future traffic growth rates at the local levels as
well as at regional and national levels. Furthermore, the NTM can
be used to assess what the traffic level at specific road segments
would be if a specific project is undertaken, such as an expansion
of the road network. Such an expansion might be expected, for
example, to lead to a change in the level of service (e.g., in travel
time, mode and destination choice, trip generation, errands etc.,)
and to finally lead to changes in the number of trips made for
various travel purposes. For forecasting purposes, the model
readily accounts for certain developments (such as the expected
population growth, changes in car ownership patterns, expected
investments that have an impact on the level of service, etc.,) and
it then produces a forecast of the expected traffic in the network
that can easily be aggregated at the local, regional, and national
levels. That said, the NTM (like all other models of this type) is
sensitive to the quality of the input data that are used (e.g., its
accuracy depends on whether the data on travel costs are correct,
whether the travel zones are specific enough to reproduce the
actual travel pattern, and so forth).
Another issue that needs to be considered because it is
relevant for the issue being addressed in this paper relates to
the way the NTM is updated. The system underlying the model
and the validation process are consistently subjected to peer
review to ensure that the model follows best practice procedures
and that it provides robust results. The last major change that was
made in the model (which continues to affect the accuracy of
NTM forecasts that are examined in this paper) occurred in 2001.
The revisions that took place at that time involved three areas:
(1) The number of zones considered in the model was increased
from only 438 to 1428; this provided an improved and a more
detailed transport and route network, (2) Updates were made for
the exogenous variables in the model (e.g., household income and
population data, and their forecasts) based on data provided by
Statistics Norway and, (3) The endogenous variables (such as
gasoline prices, the value of time, vehicle operating costs, etc.,)
were updated by entering new values. Thus, the revision that took
place in 2001 was comprehensive, but such changes still need to
be made as often as possible so the model will continue to be
based on the most current data.
4. The data
We analyze the accuracy of annual national and regional road
traffic growth-rate forecasts issued by the Norwegian Ministry of
Transport Communication (NMTC). These forecasts are made by
 J. Odeck / Transport Policy 27 (2013) 102–111
independent research institutes in Norway. The data we use are
for forecasts and outcomes for the period from 1996 through
2008. As in many other countries, the forecasts had traditionally
been issued every fourth year and the long-term plans (referred
to as the National Transport Plans (‘‘NTP’’)) were issued for the
next ten-year periods. However, there was an institutional change
in 2001 that contributed to a change in the environment in which
the forecasts are made. Beginning in that year, the involved
research institutes began providing forecasts for the whole
transport sector, and not only for roads. Thus, the forecasting
models underwent changes both in terms of the method that was
used and the variables that were included in the model. Although
the objective of this paper is not to examine specifically what
changes occurred, one objective is to investigate whether the
forecasts improved in relation to actual outcomes after the
changes occurred. This study therefore compares traffic growth-
rate forecasts against actual outcomes in three different periods:
(1) The whole period under study (i.e., 1996–2008; (2) the period
before the major change was made in the forecasting model (i.e.,
1996–2001); and (3) the period after the major change in the
forecasting model. It should be noted that until now the estimates
have always been presented as single-point estimates that did not
include confidence intervals.
When forecasts are made every fourth year, as described
above, it is natural to assume that they are revised on an annual
basis and that several annual estimates are therefore available. In
analyzing the accuracy of forecasts, we use the most recent
available forecasts on the grounds that this is what the
decision-makers were presented with. To put it more clearly, if
one wants to study the importance of forecasts for policy-making,
one should use the real-time data that was available to the
policymakers when they were making decisions. Furthermore,
even if the official forecasts are not revised annually, policy-
makers are able to consider preliminary information relating to
the forecasts that will be made for the next year in making their
annual decisions. This approach is consistent with the procedure
that has been used by forecasting economists since the work of
Theil (1961). Therefore, the forecast intervals in this study are
measured by year.
The annual data were collected from a database maintained by
the Norwegian Public Roads Administration (NPRA), which is
charged with monitoring data on road transport developments.
This database provides both the traffic growth rates that are
forecasted and the actual observed traffic growth rates at the
national level and for all 20 regions that compose Norway. Given
the availability of these data, it was appropriate to study the
accuracy of the forecasts at both the national and the regional
level. A question that naturally arises is how the traffic growth-
rate outcomes can be measured in relation to the forecasts that
are based on the model. The answer is that there are several
automated traffic counts within the regional road networks, and
these counts are considered to be representative of the actual
road networks. Therefore, the information from the counts can be
aggregated at both the regional and the national level to provide
figures for the overall outcomes that can be compared to the
forecasts. In this regard, however, one critical problem must be
addressed. The transportation network may change over time,
and as a result the automated traffic counts may become less
representative over time. However it has become a common
practice since the year 2000 in many countries, and particularly
in Norway, to implement automated traffic counts on new road
segments. Therefore, although the problem of representativeness
does exist, it can reasonably be considered small or even negli-
gible in relation to the purposes of this study. Finally, because it is
natural to compare the accuracy in traffic growth-rate forecasts
with the accuracy of forecasts obtained through alternative
105
approaches, we developed two alternative forecasts, as follows:
(i) a naı̈ve growth-rate forecast (i.e., a forecast that would reflect a
rate of change in traffic growth rates that is the same as what was
observed in the previous year) and (ii) a forecast that is based on
the GDP growth-rate forecast (i.e., a forecast that would reflect a
rate of change in traffic growth rates that is the same as the GDP
forecast issued by the Ministry of Finance). The rationale for the
first alternative forecast is that one could expect that the next
year’s traffic forecast should reflect the same patterns as were
observed in the previous year. The assumption underlying the
second alternative is that traffic growth is closely related to GDP
growth; so the rate of traffic growth is likely to be linearly
correlated with growth in GDP. If this assumption is correct, it
would mean that traffic growth-rate forecasters can simply use
the same forecasts as the ones that relate to GDP. To examine the
naı̈ve (i.e., same change) forecast, data were assembled from the
traffic growth patterns actually observed. For the GDP forecast
(i.e., same change as GDP), data on GDP forecasts were obtained
from the Royal Norwegian Ministry of Finance (NMF) forecasts
and from the evaluations of GDP growth forecasts published
annually by the Central Bank of Norway.
5. Methodology and empirical results
The methodology and empirical results of this study naturally
follow the objectives outlined in Section 1. Because different
methodological approaches are required to address each of the
proposed questions, we present the methodology and the results
for each question in each of the following sub-sections.
5.1. The magnitude of inaccuracy of traffic growth-rate forecasts
There are several possible ways to investigate the magnitude
of inaccuracy of traffic growth-rate forecasts. The most commonly
used approach, which we use in this paper, involves an evaluation
of the percentage error (PEt) between forecasts and actual out-
comes. This value can be expressed as follows:
 
yt y^ t
PEt ¼  100 ð1Þ
yt
In this equation, y^ t and yt represent the forecasted (predicted)
values and the actual values, respectively, so PEt is a measure of
the percentage error (or the discrepancy expressed in terms of a
percentage between estimates and actual values). It is clear that if
PEt 40, then the predicted value was an underestimate and if
PEt o0, then the predicted value was an overestimate. If PEt ¼0,
then the forecast exactly matches the actual outcome.
Eq. (1) can be used to compute the percentage error for each
period. Note that considering percentage changes has some
advantages over a comparison of levels. First, it reduces the
possibility that the results could be overly influenced by trend
factors. Second, and especially with respect to changes in the level
of road traffic from one year to another, policy makers are
accustomed to thinking in terms of percentage changes.
When several periods are considered, as they are in this paper,
there will be multiple forecast errors so a statistical procedure is
required to aggregate them into one single measure for all the
periods under investigation. Eq. (1) can be used to obtain several
of the different types of averages that are commonly found in the
literature on methods and applications of forecasting techniques
106 J. Odeck / Transport Policy 27 (2013) 102–111

Table 1
The magnitude of inaccuracies in forecasts.

Region All years 1996–2002 2002–2008

ME MAE MSE ME MAE MSE ME MAE MSE

|stfold 2.44 2.44 5.97 4.00 4.00 16.03 1.11 1.11 1.22
Akershus 1.52 1.52 2.32 2.62 2.62 6.87 0.58 0.58 0.34
Oslo 0.22 0.22 0.05 1.36 1.36 1.86 -0.76 0.76 0.58
Hedmark 1.69 1.69 2.85 2.77 2.77 7.67 0.76 0.76 0.57
Oppland 0.97 0.97 0.95 1.57 1.57 2.47 0.46 0.46 0.21
Buskerud 0.72 0.72 0.51 0.98 0.98 0.97 0.49 0.49 0.24
Vestfold 1.88 1.88 3.55 2.52 2.52 6.37 1.33 1.33 1.78
Telemark 1.35 1.35 1.81 2.26 2.26 5.10 0.57 0.57 0.32
Aust-Agder 0.79 0.79 0.62 1.68 1.68 2.81 0.02 0.02 0.00
Vest-Agder 1.37 1.37 1.88 1.87 1.87 3.49 0.94 0.94 0.89
Rogaland 2.10 2.10 4.40 2.90 2.90 8.39 1.41 1.41 1.99
Hordaland 1.55 1.55 2.41 2.27 2.27 5.14 0.94 0.94 0.89
Sogn-og Fjordane 0.96 0.96 0.91  0.20 0.20 0.04 1.94 1.94 3.78
Møre og Romsdal 1.17 1.17 1.37 1.42 1.42 2.02 0.96 0.96 0.91
Sør-Trondelag 1.87 1.87 3.51 1.97 1.97 3.88 1.79 1.79 3.20
Nord-Trondelag 1.49 1.49 2.23 2.34 2.34 5.50 0.76 0.76 0.58
Nordland 0.32 0.32 0.10 0.69 0.69 0.48 0.00 0.00 0.00
Troms 1.18 1.18 1.39 1.86 1.86 3.45 0.59 0.59 0.35
Finnmark 0.33 0.33 0.11  0.17 0.17 0.03 0.76 0.76 0.58
Whole country 1.31 1.31 1.71 2.02 2.02 4.07 0.70 0.70 0.48

(see, e.g., Makridakis et al., 1998). These are as follows:
X
n
ME ¼ 1
PEt
n
t¼1
Xn
MAE ¼ 1
n 9PEt 9
t¼1
Xn
MSE ¼ 1
PE2t
n
t¼1
ME represents the mean percentage of error, MAE represents
the mean absolute value percentage of error, and MSE is the mean
percentage of error squared. These measures are useful to express
the results in different ways depending on what one intends to
measure. ME tends to be small because the negative and positive
values will often offset one another. It is only useful as an
indication of whether there is systematic under- or over-
estimation in forecasting. This is commonly called a forecast bias.
On the other hand, because MAE is based on absolute values it
indicates the absolute magnitude of all the errors regardless of
direction. It thus gives an indication of the magnitude of the
biases of forecasts. Using MSE causes larger values to be given
more weight than smaller values, but in other respects it is similar
to MAE. Thus, the benefit of using MSE is that it results in scores
that reflect the fact that large errors represent a much more
serious problem than small errors (so it is appropriate to focus
primarily on larger errors to effectively reduce total errors). In
Table 1, the results for the ME, MAE and MSE measures by region
for the entire period of the study are presented. Furthermore, the
results are separated into the period from 1996 to 2001 and the
period from 2002 to 2008. The former is the period before the
forecast models were revised, whereas the latter is the period
after models were revised. This makes it possible to examine the
impact of the revision. Note that we now have a total of 13 years
of observations and 20 regions including the national forecasts.
We thus have panel data consisting of 260 (13  20) observations.
This number is a large enough to make it possible to derive
meaningful conclusions.
Consider first the results for all the years under consideration.
All the mean percentage errors (MEs) are positive, indicating that
the forecasts do not match the outcomes, and that they have
generally been underestimations. This means that the mean
absolute errors (MAE) are equal to the mean errors (ME). These
errors indicate that the forecasts, on average, underestimated the
actual traffic growth-rate outcomes by 1.31%. At first sight, these
errors might seem small or even negligible, but they may prove to
be large when they are incorporated into the planning process. To
ð2Þ illustrate the consequences of underestimations for planning,
assume an Annual Average Daily Traffic (AADT) on a road link
at 40,000 vehicles. A 1.31% underestimation would mean that the
actual traffic turned out to be 40,524 vehicles (i.e., an average of
524 vehicles per day were not taken into account). This may also
seem like a small number but when it is necessary, for example,
to calculate the expected net present value (NPV) of a project over
a 25-year period, this figure would amount to 524  365 
25¼4781,500 vehicles not being taken into account. The failure
to take so many vehicles into account may cause a project to be
considered unprofitable even if it actually would have been
profitable from a socioeconomic point of view. Calculating the
dimensions of road capacity for future traffic is another example
where an underestimation of this magnitude in traffic growth-
rate forecasts may cause a problem. Underestimation of traffic
growth rates may lead to insufficient road capacity. Thus, it is fair
to conclude that the underestimations observed in this study are
not large enough to be a serious problem in the short run, but the
cumulative effects of such underestimation are relevant for long
term planning purposes and they represent a major problem.
There is a significant variation between regions. The largest
percentage of underestimation was found to be 2.44% and the
lowest percentage was found to be 0.22%. This result indicates
that the forecasters had more problems with some regions than
with others. When the mean percentage squared error (MSE) (i.e.,
the measure that gives more weight to larger errors) is consid-
ered, the variation between regions is very large because the
scores range from 0.05% to 5.97%. We turn, now, to the issue of
confidence intervals that should be presented to decision makers
along with the forecasts. Consider the traffic forecast (y^ ) for a
specific region. Confidence intervals can be constructed on the
basis of information on the distribution of forecasts for all regions.
By calculating the standard error for all the forecasts (SEY), a
confidence interval at the 5% significance level can be calculated
as ½y^ 1:96SEY ; y^ þ1:96SEY  where 1.96 is the t-value for a 5%
significance level for a normally distributed random variable. To
illustrate, we use the standard error for forecasts across all
 J. Odeck / Transport Policy 27 (2013) 102–111
regions in 1998. The standard pffiffiffi deviation for that year was 1.66.
The error is therefore 1:66= 5 ¼0.742. If the traffic growth-rate
forecast for a certain region (say, Oslo) was found to be 4%, then a
confidence interval at the 5% significance level would indicate
that the true value is likely to fall within the interval between
[2.55 and 5.45]. When this information is presented to the
decision makers, they will have a better understanding of the
level of accuracy or precision that characterizes the forecasts. As
another way of presenting confidence intervals, the modeler
should provide the confidence intervals surrounding his point
estimates because he knows how likely it is that his individual
estimates will occur. He can, therefore, construct confidence
intervals using this information and present it to the decision-
maker. This approach is appropriate because it relies on the
distribution of the parameters of each individual forecast. Unfor-
tunately, the confidence intervals for the forecast estimates are
never provided to the decision makers even though they can
easily be calculated.
Our tentative conclusions regarding the magnitudes of the
inaccuracy of regional and national traffic growth-rate forecasts
for Norway are as follows: (i) the traffic growth-rate forecasts are
fairly inaccurate, (ii) the confidence intervals for the estimates are
fairly easy to calculate, but they are not provided and (iii) the
estimates that are provided to the decision makers are presented
as single-point estimates without confidence intervals. Therefore,
the decision makers are not given an indication of the intervals
within which the traffic growth-rate outcomes are expected
to fall.
5.2. Did the revision of forecasting models improve the accuracy
of traffic growth-rate forecasts?
As discussed in the introduction, the forecasting models were
revised in 2001. It is worthwhile to investigate whether this
revision improved the accuracy of the traffic growth-rate fore-
casts. The information presented in the right-hand side of Table 1
shows the three measures of mean percentage errors (ME, MAE
and MSE) for the period before the revision (1996–2001) and for
the period after the revision (2002–2008). All the error values
except for the values relating to two regions are greater for the
period 1996–2001 than for the period 2002–2008. This result
indicates that the revision improved the forecasts. The average
magnitude of inaccuracy for the entire country, as measured by
MEA, decreased from 2.02% in the earlier period to 0.7% in the
latter period. This decrease appears to be an indication of a
substantial improvement, but it is important to investigate
whether these observations are statistically significant.
Table 2 presents the results of a t-test for the difference
between the means and an F-test for the difference between the
variance of the two periods. Test statistics with high p-values
would indicate that it would not be appropriate to conclude that
Table 2
T- and F-tests for the difference between means and variances for periods 1996–2001
and 2002–2008.
t-test for the difference between means
p-value a t-(observed value) t-(critical value)
ME 0.000 0.050  3.904 2.028
MAE 0.000 0.050 4.271 2.028
MSE o 0.0001 4.424 2.028
Fisher’s F-test for the difference between variances
p-value a F (Observed value) F (Critical value)
ME 0.037 0.050 2.685 2.526
MAE 0.009 0.050 3.510 2.526
MSE o 0.0001 0.050 13.205 2.526
107
there are meaningful differences between the two periods,
whereas test statistics with low p-values would indicate that
there is good a reason to believe that there are real differences
between the two periods that are too large to be attributed to
chance. Almost all the computed p-values are much lower than
the a ¼ 0.05 significance level. Therefore, the null hypotheses (i.e.,
that the means are the same or that the variances are the same)
should be rejected. This result demonstrates that the magnitude
of inaccuracy of forecasts became lower after the revision. This
fact is illustrated more fully in Fig. 2, where a box-plot of mean
errors across all years is plotted. A box-plot shows five pieces of
statistical information for each of the periods considered; sample
minimum, median, 25th percentile, 75th percentile, and sample
maximum. A box-plot is useful for displaying the distribution of
scores for variable and pinpointing outliers. In Fig. 2, the bottom
and top marks in each box indicate the 25th and 75th percentiles,
which represent the lower and upper quartiles, respectively. The
band near the middle of the box is the median. The minimum and
the maximum values in the data are represented by the end of the
whiskers. The figure clearly shows that the median errors are
much higher for the 1996–2001 period compared to the 2002–
2008 period. Further observations can also be noted with respect
to the plots. It is evident that the magnitude of the inaccuracies
tends to increase over time regardless of the period of study. This
may call for a practice of consistently revising the forecasts each
year. As noted in the introduction, however, forecasts are issued
only every fourth year in conjunction with transport plans.
A conclusion that can be drawn here is that the major changes
that took place in relation to the forecasting model that included
an improvement in the quality of data that was entered into the
models and an increase in the number of zones (which made it
possible to consider the transport network at a more detailed
level) improved the accuracy of traffic growth-rate forecasts.
5.3. How do the growth-rate forecasts compare to alternative
forecasts?
Next, to help judge the accuracy of the traffic growth-rate
forecast models compared to other possible alternative forecasts,
we compare the road authorities’ traffic growth-rate forecasts to
the two alternative forecasts mentioned in the introduction. The
two alternative models that are considered are (i) a naı̈ve forecast
model (where the naı̈ve forecaster assumes that the traffic growth
this year will be the same as last year’s growth, and (ii) a GDP
forecast where the forecaster assumes that the traffic growth
corresponds to the growth rate of the GDP. The rationale for
considering the two alternative formulations is as follows: First, if
the naı̈ve forecasts prove to be better than the forecasts obtained
by using the forecast model, then there will be no need for the
more sophisticated forecasting model that is currently used
because the forecasts that are obtained by using it are no better
than the naı̈ve forecasts. Second, the traffic growth rate has
traditionally been assumed to be proportional to the growth rate
of the GDP. (In this regard, however, recent studies (e.g., Tapio,
2005)) seem to suggest that the relationship between GDP growth
rates and traffic growth rates may not be significant.) If the
traditionally assumed relationship does exist, then it would be
reasonable for traffic forecasters to simply rely on the GDP
forecasts made by the Ministry of Finance.
A comparison of these alternative forecasts to the actual traffic
outcomes is presented in Table 3. Comparisons to the GDP
forecasts are made only for the national forecasts and not for
the regional forecasts for the simple reason that GDP forecasts are
only made for the nation as a whole.
Table 3 provides a comparison of the discrepancies between
the alternative forecasts and the forecasts obtained from the
108 J. Odeck / Transport Policy 27 (2013) 102–111

Fig. 2. A boxplot of inaccuracy of forecasts across all years.

traffic growth-rate forecast model for the whole period and for Table 3
the periods before and after the traffic growth-rate forecast model A comparison of discrepancies between alternative forecast models.
was revised. First, consider the comparisons for the whole period
All years 1996–2001 2002–2008
being studied. The best performing forecast model is the naı̈ve
forecast model, whereas the GDP forecast model is the worst ME MAE MSE ME MAE MSE ME MAE MSE
performer. The performance of the traffic forecasts made by the
road authorities falls in between the performance levels of these Traffic forecast 1.31 1.31 1.71 2.02 1.92 4.07 0.70 0.70 0.48
Naive forecast 0.09 0.09 0.01 0.33 0.03 0.11  0.13 0.13 0.02
two alternative forecasts. The ME, MAE and MSE are in the range GDP forecast 1.50 1.50 2.26 0.55 0.82 0.30 2.32 2.32 5.39
1.31–1.71 for the prevailing traffic growth-rate forecast, less than
1 for the naı̈ve forecasts and above 1.5 for the and the GDP
forecasts. Next, the results relating to the time periods before and fact that the factors that affect traffic growth are constantly
after the revisions in the forecasting model can be compared. The changing means that it may be dangerous to rely only on naı̈ve
naı̈ve forecasts sustain their lead in both periods, and the GDP forecasts because there is no guarantee that the naı̈ve model
forecasts are still the worst performers in both periods. However, would be able to adequately accommodate the changing environ-
it is important to note that the relative performance of the naı̈ve ment. Therefore, our suggestion is that the traffic growth-rate
forecasts and the GDP-based forecasts worsened in the period forecasting models need to be continually improved and scruti-
after the revision, but the performance of the traffic forecasts nized so that they can be as precise as possible.
improved. It is, therefore, reasonable to conclude that the model
for forecasting improved after the revisions because it became 5.4. The presence of bias in forecasts
more precise.
Given the observations noted above, a tentative conclusion for Thus far, we have only examined the amount of inaccuracy in
this section is that the revision of the forecast model that the forecasts and how the amount of inaccuracy in forecasts that
occurred after the year 2001 seems to have improved the are based on the road traffic forecasting model compares to
accuracy of forecasts. Finally, it would not be reasonable to amount of inaccuracy in alternative forecasts. Next, we check
assume that GDP forecasts can be used as the basis for traffic the traffic forecasts for bias. Biased forecasts are significantly one-
growth-rate forecasts because the traffic growth-rate forecasts sided (i.e., they either overestimate or underestimate real traffic
that are based on the GDP forecasts are less accurate than the outcomes). To determine whether the prevalence of underestima-
forecasts that are currently being produced. An interesting obser- tion described above actually represents bias, an appropriate
vation that can be made in relation to the existing literature is econometric framework must be used. Suppose that we have a
that traffic growth rates do not necessarily follow GDP growth sequence of road traffic forecasts and outcomes denoted by yt , y^ t
rates as some analysts had previously assumed. Because the naı̈ve where, as before, y^ t and yt represent the forecasted (predicted)
forecasts are the best performers, it is tempting to conclude that and actual values, respectively. A good traffic forecast is one that
they should be used, at least at the national level. However, the does not incorporate a tendency to systematically overestimate or
 J. Odeck / Transport Policy 27 (2013) 102–111 109

underestimate. It is, in other words, an unbiased forecast. In
statistical terms, this is written as follows:
 
Et y^ t yt ¼ 0, ð3Þ
where Et denotes the expectation for period t and the equation
expresses the fact that the forecasts are expected to match the
actual outcomes, so the difference between forecasts and actual
observations is expected to be zero. To test whether this is
actually the case, a regression in the following form was con-
ducted:
yt ¼ a þ by^ t þ et ,
where a and b are the parameters to be estimated.
It is clear from this equation that the joint null hypothesis that
the forecasts are unbiased implies that a ¼0 and b ¼1. If that is
the case, then the forecasts are unbiased and Eq. (1) holds. This
means that the forecasts match the traffic outcomes that are
actually observed. If the results of the regression show that a a0
and that b a1, and if the discrepancy from the results predicted
by the null hypothesis is significant, then it means that the
forecasts do not match the outcomes so they are biased. Although
this test provides a sufficient basis for concluding that the
forecasts are not biased, however, it does not represent a
necessary condition for the absence of bias, as noted by Holden
and Peel (1990). (See also Clements, 2005). The reason is simple;
Eq. (4) is also satisfied if
 
a ¼ ð1bÞEt y^ t ð5Þ
Thus, a more satisfactory test for the absence of bias is a test of
t ¼ 0 in the following regression (Clements, 2005):
et ¼ yt y^ t ¼ t þ ut ,
In other words, the appropriate test for bias in estimates
examines whether the forecast error has a mean of zero. This
amounts to regressing the forecast error on a constant (t) and
using a t-test to evaluate the hypothesis that t ¼ 0. Thus, while
Eq. (4) indicates a sufficient but not a necessary condition for the
absence of bias, Eq. (6) provides a test for the necessary and
sufficient condition for the absence of bias. We estimated both
Eqs. (4) and (6). As shown in the results presented below, the
results relating to Eq. (4) showed bias in the forecasts in some
regions, so it was necessary for us to estimate Eq. (6). The results
are presented in Table 4.
Consider first the parameter estimates relating to Eq. (4) that are
shown in the second and third columns of the table. The significance
of the parameters a and b vary between regions, for the country as a
whole, and between the periods being considered. Some of the
values are significant, as shown by their p-values, but others are not.
Consider next the joint hypothesis in relation to Eq. (4) that a ¼0
ð4Þ
and b ¼1, which represents the sufficient but not the necessary test
for the absence of bias. The results are reported in column 4. The
majority of regional forecasts are shown to be unbiased, as is
evident from the F-statistics (i.e., F-stat) where bias was found in
only 4 regions out of 19. This is a reassuring result that may help to
alleviate the criticism of the forecasts. It is now interesting to
consider the peculiarities of the four regions where the forecasts
were found to be biased. They are all located either in the eastern
part of Norway (which accounts for approximately 40% of the total
traffic volume in Norway) or in Finnmark (which is the region that is
farthest to the north and has a very low traffic volume). This
indicates that the analysts who prepared the forecasts experienced
some difficulty in forecasting traffic at the extreme ends of the
traffic-volume scale. The three regions in the eastern part of Norway
(i.e., |stfold, Akershus and Oslo) that had biased forecasts are located
along the Swedish border, and they carry approximately 70% of all
international traffic that enters Norway. Furthermore, in the past
decade there has been a tremendous increase in the number of
immigrants from Eastern European countries (such as Poland, Latvia,
Lithuania and Estonia) who came to work in these three regions.
ð6Þ
This may indicate that the traffic forecasts are not able to capture
international traffic very accurately, and it may also indicate
difficulties in predicting the impact of population growth due to
immigration or the impact of foreign workers on household income.
For Finnmark, the situation is similar. It borders both Russia and
Finland, and labor immigration from these countries into the region
is prevalent.

Table 4
Test for unbiasedness and weak-form efficiency Eq. (4): yt ¼ a þ by^ t þ et ,and Eq. (6): et ¼ yt y^ t ¼ t þ ut ,

Region a b F-Stat. (H0: a ¼ 0 and b ¼ 1) F-Statistics for e T-Statistics g F-Statistics for u

n n n
Øtsfold 0.362 (0.01) 0.386 (0.47) 9.726 (0.01) 0.463 (0.51) 2.662 (0.00) 1.141 (0.36)
nn n nn nn
Akershus 3.639 (0.02) 0.130 (0.71) 7.249 (0.02) 6.922 (0.03) 0.527 (0.48) 3.971 (0.05)
nn
Aust Agder 1.508 (0.04) 0.364 (0.36) 0.755 (0.40) 0.957 (0.35)  1.080 (0.21) 1.544 (0.26)
Buskerud 1.123 (0.43) 0.737 (0.07) 0.663 (0.43) 1.616 (0.23) 0.239 (0.70) 0.564 (0.59)
nn n n
Finnmark  1.659 (0.01) 1.655 (0.00) 9.489 (0.01) 0.793 (0.39) 0.377 (0.48) 3.038 (0.09)
nn nn
Hedmark 2.222 (0.08) 0.767 (0.04) 3.685 (0.08) 0.331 (0.58) 1.480 (0.02) 0.172 (0.84)
n nn nn
Hordaland 0.227 (0.83) 1.300 (0.00) 0.048 (0.83) 5.988 (0.03) 1.312 (0.02) 4.844 (0.34)
nn
More og Romsdal 1.050 (0.41) 0.979 (0.03) 0.745 (0.01) 0.824 (0.47) 0.991 (0.08) 1.503 (0.27)
n n
Nord Trondelag 1.070 (0.07) 1.267 (0.00) 3.976 (0.07) 0.112 (0.75) 1.796 (0.00) 0.396 (0.68)
n
Nordland  0.892 (0.32) 1.300 (0.00) 1.088 (0.42) 4.026 (0.07)  0.109 (0.80) 1.982 (0.19)
n
Oppland 0.301 (0.72) 1.020 (0.00) 0.141 (0.71) 0.039 (0.85) 0.373 (0.34) 0.342 (0.72)
nn n
Oslo 2.350 (0.03)  0.052 (0.84) 6.322 (0.03) 0.779 (0.40)  1.217 (0.08) 1.504 (0.27)
n n
Rogaland 1.253 (0.46) 1.227 (0.01) 0.599 (0.46) 1.672 (0.24) 2.110 (0.01) 2.456 (0.14)
n n
sogn og Fjordane.  2.084 (0.32) 2.130 (0.01) 1.072 (0.32) 3.796 (0.08) 1.224 (0.24) 8.340 (0.01)
n n n
Sør-Trondelag  1.063 (0.41) 1.962 (0.00) 0.723 (0.41) 1.983 (0.19) 2.260 (0.01) 6.759 (0.01)
n n
Telemark 1.640 (0.12) 0.922 (0.00) 2.831 (0.12) 0.001 (0.98) 1.363 (0.02) 0.007 (0.56)
n n
Troms  0.465 (0.71) 1.582 (0.00) 0.147 (0.71) 3.188 (0.10) 1.450 (0.05) 1.449 (0.28)
n
Vest Agder 0.534 (0.72) 1.052 (0.01) 0.136 (0.72) 4.425 (0.06) 0.728 (0.29) 2.312 (0.50)
nn nn
Vestfold 3.104 (0.12) 0.647 (0.18) 2.783 (0.12) 5.687 (0.04) 1.806 (0.04) 1.870 (0.20)
n nn
Whole country forecast 1.181 (0.29) 0.919 (0.01) 1.212 (0.29) 6.451 (0.03) 0.909 (0.07) 2.717 (0.11)
n n
Whole country (1996–2001) 3.467 (0.01)  0.223 (0.31) 33.043 (0.00) 0.050 (0.84)  0.955 (0.26) 4.149 (0.11)
n
Whole country (2001–2008) 0.591 (0.40) 1.291 (0.00) 0.852 (0.40) 3.297 (0.14) 0.818 (0.07) 0.111 (0.75)

Note: P-values are in parentheses. The F-stat tests the joint hypothesis that a ¼0 and b ¼1. The T-statistics for g and the F-statistics for u test the hypothesis that there is no
serial correlation among the error terms.
n
Indicate 1% and 5% significance levels, respectively.
nn
Indicate 1% and 5% significance levels, respectively.
110 J. Odeck / Transport Policy 27 (2013) 102–111
The overall results for the whole country that are shown in the
lower part of Table 4 can also be considered. The results show
that under the sufficient but unnecessary test for the absence of
bias, the overall traffic forecasts cannot be considered biased
because the p-value is above 20%. The two last rows of Table 4
shows the results for the whole country in the two separate time
periods (i.e., in the period 1996–2001 before the forecast model
was revised, and in the period 2002–2008). The results indicate
that the forecasts were biased in the period before the forecast
model was revised, but they were unbiased in the subsequent
period. This confirms our earlier observation that the discrepancy
between forecasts and outcomes seems to have declined sub-
stantially after the models were revised.
Because Eq. (4) revealed bias for some regions, it necessary to
proceed to Eq. (6) in order to complete the test for bias. The result
of this final test is the T-statistic for g shown in column 6 of
Table 4. The results relating to this test also show that approxi-
mately half of the regions show an absence of bias (as can be seen
by the p-values of the estimates) but the forecasts for the other
half show some bias. When the results relating to the country as a
whole and the changes between different periods are considered,
the T-statistics for g indicate unbiased forecasts. Thus, the con-
clusion that can be drawn from the observations considered up to
this point is that that the traffic forecasts for Norway as a whole
are unbiased, and the absence of bias becomes more obvious in
the period after the forecasting model was revised. However, the
forecasts relating to specific regions show bias in approximately
half of the regions. This result indicates that forecasters still have
some room to improve in respect to specific regional forecasts. In
particular, as mentioned before, biased forecasts are prevalent in
relation to regions where there is extensive international traffic
and immigration. Thus, one area for improvement must be to find
a way to adequately capture the volume of international traffic
and the impact of immigration on population and household
income.
The next question to address is the direction of bias. For
various regions and for the country as a whole in the period
1996–2006, the direction of bias is toward underestimation, as
can be seen by the signs of the coefficient for the constant (a).
This coefficient is positive for most of the cases where bias was
found, so this indicates that underestimation is the major cause of
bias. The findings also confirm our earlier observations that the
forecasts were more biased before the forecasting models were
revised, and that underestimation was prevalent in that period.
5.5. Are the forecasts efficient?
If forecasts are efficient, they will take into account informa-
tion relating to the most recent actual outcomes as well as the
lessons that have been learned from previous forecast errors. A
failure of forecasts to take into account all the relevant informa-
tion that was available at the time the forecasts were prepared is
considered to be inefficient. There are two types of tests for
informational efficiency. One is called a weak form test and the
other, which is known as an orthogonality test, considers whether
forecast errors are (or are not) related to information that had
been available.
The first test for the efficiency of forecasts (i.e., the weak form
test) is a test for serial correlations in the forecast errors
generated by Eqs. (4) and (6). It postulates that the most recent
actual outcomes should be taken into account in the next round of
forecasts, and that the forecast errors in subsequent forecasts
should, therefore, not be correlated with the errors in earlier
forecasts. The results of the weak-form tests for efficiency of
forecasts are also presented in Table 4. The test statistics are the
F-statistics for e and u in Eqs. (3) and (5). They are presented in
columns 5 and 7, respectively. The p-values for the F-statistics
indicate that inefficiency (as defined by the weak-form test) is
present only in the forecasts for a few regions. For the nationwide
forecasts, weak inefficiency exists only with respect to the
residual (e) in Eq. (4). Overall, it is fair to conclude on the basis
of these findings that the forecasts are not plagued by weak-form
inefficiency. To confirm these findings, however, it is appropriate
to proceed to the second-stage efficiency test.
The second test for informational efficiency is the orthogon-
ality test. The major assumptions of this test are that the forecast
errors should not be correlated to all previous forecasts, they
should not be correlated to previous forecast errors and, finally,
they should not be correlated to the information on variables that
were treated as important factors in the development of previous
forecasts (such as personal and household income that can be
inferred by using growth in GDP as a proxy). This principle
implies that forecast errors should not be correlated to past
GDP as described above. The underlying rationale for this test is
that all of this information should be known to the forecaster
when forecasts are being prepared (i.e., the forecaster should be
able to observe the previous errors, the previous forecasts, and
the actual values of any variables [such as growth in GDP] that
were important when the previous forecasts were prepared) and
the forecaster should take all of this information into account.
Thus, the errors in the new forecasts should not be correlated to
these previous observations. To conduct the orthogonality test for
efficiency, the following equation was estimated:
et ¼ a þ petj þ ly^ tj þ jGDPtj þ dt , ð7Þ
where et is the forecast error for year t, et  j is the forecast error for
year t  j, y^ tj is the forecast in year t j and GDPt  j is the growth
in GDP in year t  j. Because the GDP growth rates were not
monitored for individual regions, we conducted the orthogonality
test only for the national forecasts. This test provides a measure of
the overall efficiency performance of forecasts. Further, because
the number of observations in our dataset was fairly small
relative to the number of variables that were considered, we
checked for bivariate relationships between the current error and
past variables.
The estimation results for Eq. (7) are shown in Table 5. The
table includes the p-values for the t-statistics that were used to
test the hypothesis that p, l and j are all equal to zero. The
results show clearly that none of the variables entered in Eq. (7) is
significantly correlated with the forecast errors. Hence, we can
conclude that the evidence does not indicate that the forecasts are
significantly inefficient.
6. Concluding remarks
This paper has scrutinized the annual road traffic growth-rate
forecasts made by the Norwegian road authorities. Forecasts are
made for each individual region (19 in all) and for the country as a
whole, and the data cover a 13-year period. The motivation for
assessing the accuracy of the forecasts is the fact that the
Table 5
Testing for the efficiency of forecasts.
Coefficients (p-value)
Constant(a)  0.596 (0.76)
et  2 0.818 (0.37)
Yt  2 0.591 (0.38)
GDPt  2  0.412 (0.65)
R2 0.190 (0.67)
DW 1.450
 J. Odeck / Transport Policy 27 (2013) 102–111
forecasts are the basis for policy formation. Because inaccurate
forecasts may lead to inappropriate policies, scrutinizing forecasts
may highlight the importance of improving the methods used in
preparing the forecasts. We studied the forecasts that were issued
over the period from 1996 to 2008, taking note of the fact that the
forecasting methods were revised at the beginning in 2002. This
approach made it possible to test whether the revised method
improved the forecasts. It is important to note that our study is
the first to study forecasts of the national and regional traffic
growth rates (as opposed to project-specific traffic forecasts) that
has also examined the extent of inaccuracy, presence or absence
of bias, and inefficiency. The following conclusions that were
obtained by using succinct statistical and econometric approaches
can be highlighted:
(a) There is a discrepancy between road traffic forecasts and the
actual traffic outcomes, and underestimation in the forecasts
is prevalent. This discrepancy may have contributed to
significant adverse consequences for the policies that are
based on these forecasts, especially in the long run.
(b) The quality of the forecasts has improved in the years since
the forecasting models were revised in 2001, and the magni-
tude of the discrepancies between forecasts and actual out-
comes has clearly declined in the period after the revisions
went into effect. This is a welcome result for the analysts who
prepare the forecasts.
(c) Across all of the years considered in the study, there were
biased and/or inefficient forecasts in a minority of regions, but
the forecasts for the country as a whole have generally been
unbiased and efficient, especially in the period after the
forecasting method was revised in 2001. Further, it appears
that the forecasters do appropriately take into account most
of the information that can be known at the time the forecasts
are made. However, there is some evidence that forecasters
have problems in incorporating the effects of international
traffic and the impact of immigration on the population and
on households into the forecasts even though these factors
have been recognized as relevant inputs in the forecasting
models.
Thus, a general conclusion that can be drawn from this study is
that the road traffic forecasts issued by Norwegian authorities
have improved a great deal in recent years; however, they are still
not perfectly accurate. Therefore, forecasters should present their
forecasts in such a way that the single-point estimates are
supplemented by confidence intervals. The findings of this study
also showed that forecasters have serious problems forecasting
traffic growth rates in areas that have either an exceptionally low
or an exceptionally high volume of traffic, that have extensive
international traffic, and that have experienced labor force immi-
gration. Accurately predicting traffic growth rates at the regional
level should therefore be an area of concern for forecasters, and
improving their ability to effectively take international traffic and
labor force immigration into account should also be a should be a
major area of focus. Further, as indicated by Fig. 2, the forecasts
need to be revised on an annual basis by entering the most
current input data.
Finally, the findings in this paper of significant underestima-
tion in the national and regional traffic growth-rate forecasts for
111
Norway support the previous findings of Kjerkreit and Odeck
(2009) who obtained similar results in relation to forecasts that
were issued at the project-specific level. Thus, a challenge for
other researchers who have studied project-specific forecasts will
be to make an attempt to study national and regional traffic
growth-rate forecasts to see whether project and national or
regional forecasts follow the same trends with respect to accu-
racy. It is only in this way that a researcher would be able to
determine whether inaccuracy in traffic forecasts applies to
specific nations or regions.
Acknowledgements
I am grateful to Senior Economist Kjell Johansen, Senior Economist
Anne Kjerkreit, Senior Engineer Oskar Andreas Kleven and Dr. Morten
Welde, who are all members of the Norwegian Public Roads Admin-
istration, for their encouragement and their assistance in providing
quality control in relation to the data used in this study. Finally,
thanks are also due to Dr. Farideh Ramjerdi at the Norwegian Institute
of Transport Economics, Professor Svein Bråthen at Molde University
College and Senior Research Economist Jens Rekdal at Molde Research
for insightful comments and encouragement when I was drafting this
paper. Any errors are my sole responsibility, however, and should not
be attributed to any institution or individual mentioned above.
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