David Budescu (a cognitive psychologist who has studied the perception of uncertainty) has the following thoughts on John Sides’s work on overestimation of immigrants:

I don’t have much to add to some of the comments. This overestimation is, probably, due to a combination of several factors:
(a) different definions of the target event (the judges may generalize and assume, for example, that all the children of foreign born residents are also born abroad),
(b) vividness (members of of the target population stand out — looks, accent, language, clothing),
(c) clustering (often they are concentrated in certain areas),
(d) typically, these surveys don’t employ incentives for truthful responding (i.e. proper scoring rules), and some people may respond “strategically” by inflating their estimates to make a political point.