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Benford's Law, families of distributions and a test basis

Morrow, John (2014) Benford's Law, families of distributions and a test basis. CEP Discussion Papers (CEPDP1291). Centre for Economic Performance, London School of Economics and Political Science, London, UK.

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Abstract

Benford's Law is used to test for data irregularities. While novel, there are two weaknesses in the current methodology. First, test values used in practice are too conservative and the test values of this paper are more powerful and hold for fairly small samples. Second, testing requires Benford's Law to hold, which it often does not. I present a simple method to transform distributions to satisfy the Law with arbitrary precision and induce scale invariance, freeing tests from the choice of units. I additionally derive a rate of convergence to Benford's Law. Finally, the results are applied to common distributions.

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk/_new/publications/series.asp?...
Additional Information: © 2014 The Author
Divisions: Centre for Economic Performance
Subjects: H Social Sciences > HA Statistics
H Social Sciences > HB Economic Theory
JEL classification: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods: General > C10 - General
C - Mathematical and Quantitative Methods > C2 - Econometric Methods: Single Equation Models; Single Variables > C24 - Truncated and Censored Models
C - Mathematical and Quantitative Methods > C4 - Econometric and Statistical Methods: Special Topics > C46 - Econometric and Statistical Methods: Specific Distributions
Sets: Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Date Deposited: 28 Nov 2014 17:05
Last Modified: 14 Aug 2019 23:42
Funders: Economic and Social Research Council
URI: http://eprints.lse.ac.uk/id/eprint/60364

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