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Remarks on the Use of Benford's Law

19 Pages Posted: 20 Dec 2009  

James C. Alexander

Case Western Reserve University - Department of Mathematics and Cognitive Science

Date Written: November, 13 2009

Abstract

Benford's law is a method of digital analysis that is used to probe sets of data. It is based on the frequency of occurrence of the digits '1' through '9' of the first significant digit of data values. A chi-square or similar frequency test is usually used. An alternative to the usual statistical methodology of digitally analyzing data for conformance with Benford's law is presented. This method is based on the more basic phenomenon underlying the frequency of the first digit, and thus is more robust and powerful. This method has a firm basis in statistical theory; critical values can be precisely determined. Other concomitant issues concerning Benford's law are also examined.

Keywords: Benford's law, digital analysis, circular data analysis, conformance testing

JEL Classification: C12

Suggested Citation

Alexander, James C., Remarks on the Use of Benford's Law (November, 13 2009). Available at SSRN: https://ssrn.com/abstract=1505147 or http://dx.doi.org/10.2139/ssrn.1505147

James C. Alexander (Contact Author)

Case Western Reserve University - Department of Mathematics and Cognitive Science ( email )

Cleveland, OH 44106
United States

HOME PAGE: http://www.cwru.edu/artsci/math/alexander/

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