Underestimate

Underestimate is a term used as both a verb and a noun. As a verb, it means to judge or calculate something to be smaller than it actually is; to misjudge the size, amount, importance, or potential of something. As a noun, an underestimate is the act or result of underestimating, or the amount by which an estimate falls short of reality. The word is formed from the prefix under- and the word estimate, and it is common in many English-speaking contexts.

Underestimation appears in everyday planning as well as technical and professional assessment. It is associated with a class of cognitive biases, including optimism bias and the planning fallacy, in which people forecast too little time, money, or resources. Causes can include incomplete information, reliance on selective data, or overconfidence. Consequences can include project delays, budget overruns, safety shortfalls, and misallocation of resources.

Mitigating underestimation involves methodological approaches and disciplined planning. Techniques such as reference class forecasting compare a project with outcomes from similar efforts to counter bias. Scenario analysis and probabilistic budgeting help quantify uncertainty, while independent estimates, staged milestones, and contingency reserves can reduce bias in forecasts. Acknowledging the tendency to underestimate and applying structured estimation practices are common recommendations in project management, finance, and policy planning.