overestimate

Overestimate is the act of judging or calculating a value to be greater than the actual value. It can refer to numerical estimates, predictions, or assessments of importance, probability, or size. The term derives from over- plus estimate and is often contrasted with underestimate.

In statistics and research, an estimator that produces values systematically larger than the true parameter is said to be biased upward. Causes include model misspecification, data selection effects, measurement error, or cognitive biases that affect data interpretation.

In planning, economics, and project management, overestimation occurs when forecasts of costs, timelines, demand, or returns are higher than what occurs in reality. This can lead to inflated budgets, delays in completion, missed opportunities, or inefficient allocation of resources. Deliberate exaggeration for political or competitive reasons is a separate dimension, but many cases involve unconscious optimism.

Cognitive and behavioral factors contributing to overestimation include optimism bias, overconfidence, and the planning fallacy in some contexts, though the planning fallacy more often emphasizes time underestimation; both can interact with incentives and information asymmetry.

Mitigation approaches include using historical data and reference-class forecasting, presenting forecast ranges rather than single point estimates, conducting sensitivity analyses, independent reviews, and calibration against out-of-sample outcomes to reduce upward bias.