On a busy day at Disneyland, the posted wait signs strike terror in the hearts of visitors from all around the world. However, many Disneyland guests can't help but wonder just how accurate those signs are. How often are they updated? How are wait times calculated? Do they inflate the actual wait time to prevent too many people from flooding the queue? Do they minimize the time in hopes of getting more people in line??? Okay, enough questions. Here are some answers.
Speaking as a former Disneyland attractions cast member with a great degree of experience, I can tell you with great certainty that the posted wait times, more often than not, are nothing more than arbitrary estimations. It is no particular cast member's job to update the wait time. It's usually just the job of however happens to be closest to the control box that is used to adjust the wait time. Cast members are generally free to manipulate the wait time however they see fit.
So, to answer some of the earlier questions, yes, the wait time is commonly exaggerated in hopes of diverting people away from the attraction. And yes, the wait time is also minimized in the interest of not immediately upsetting guests. It all depends on who is setting the time. A 19 year old cast member who is rather unconcerned with guest satisfaction is probably more inclined to do the former, while an attraction lead or area manager is more likely to be guilty of the latter.
Now, this isn't to say that the wait time is never accurate. There are seasoned cast members on any given attraction that do have a good understanding of how long it really takes guests to move through the queue. These cast members take into account several factors, including the current capacity of the attraction (such as how many vehicles are in use), as well as the efficiency of the crew that happens to be working. However, more often than not, these seasoned cast members are not the ones fiddling with the wait time. Sometimes the cast member out front near the wait time adjuster will get a call from someone inside the ride who actually has a reasonably accurate estimation and they will be informed of what to set the wait time to (of course, they don't always do as they're told).
There are a few exceptions to this. Once in a blue moon (a few times a year as I recall, usually on the busiest days) the attraction lead will have the cast member at the entrance of the attraction pass out little cards to random guests getting into line, and ask them if they would mind giving it to the cast member that they meet in the station. They then write the time the card was issued, and when the cast member inside collects it, they can do the math and get a more accurate idea of the actual real-world wait time.
So, in conclusion, you shouldn't really have a whole lot of faith in the posted wait times. Overall though, I'd say that in the majority of cases, the posted wait time is usually higher than the actual wait time. This is pretty common practice because it's much better for guests to be relieved that they got through sooner rather than later, instead of having them walking around fuming mad and taking it out on the poor helpless cast members.