Benford's Law and Macroeconomic Data Quality

22 Pages Posted: 11 Mar 2009

See all articles by Jesus Gonzalez-Garcia

Jesus Gonzalez-Garcia

International Monetary Fund (IMF)

G. Pastor

International Monetary Fund (IMF)

Date Written: Janurary 2009

Abstract

This paper examines the usefulness of testing the conformity of macroeconomic data with Benford's law as indicator of data quality. Most of the macroeconomic data series tested conform with Benford's law. However, questions emerge on the reliability of such tests as indicators of data quality once conformity with Benford's law is contrasted with the data quality ratings included in the data module of the Reports on the Observance of Standards and Codes (data ROSCs). Furthermore, the analysis shows that rejection of Benford's law may be unrelated to the quality of statistics, and instead may result from marked structural shifts in the data series. Hence, nonconformity with Benford's law should not be interpreted as a reliable indication of poor quality in macroeconomic data.

Keywords: Data analysis, Data quality assessment framework, Reports on the Observance of Standards and Codes, International Financial Statistics, Gross domestic product, Economic models, Cross country analysis, Transparency, Statistical annexes

Suggested Citation

Gonzalez-Garcia, Jesus and Pastor, G., Benford's Law and Macroeconomic Data Quality (Janurary 2009). IMF Working Papers, Vol. , pp. 1-20, 2009. Available at SSRN: https://ssrn.com/abstract=1356437

Jesus Gonzalez-Garcia (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Room: HQ2 10A-572
Washington, DC 20431
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(202) 6236310 (Phone)
(202) 6236159 (Fax)

G. Pastor

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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