Benford's Law as an Indicator of Fraud in Economics
AbstractContrary to intuition, first digits of randomly selected data are not uniformly distributed but follow a logarithmically declining pattern, known as Benford's law. This law is increasingly used as a 'doping check' for detecting fraudulent data in business and administration. Benford's law also applies to regression coefficients and standard errors in empirical economics. This article reviews Benford's law and examines its potential as an indicator of fraud in economic research. Evidence from a sample of recently published articles shows that a surprisingly large proportion of first digits, but not of second digits, contradicts Benford's law. Copyright 2009 The Author. Journal Compilation Verein für Socialpolitik and Blackwell Publishing Ltd.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Verein für Socialpolitik in its journal German Economic Review.
Volume (Year): 10 (2009)
Issue (Month): (08)
Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=1465-6485
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- David Giles, 2007.
"Benford's law and naturally occurring prices in certain ebaY auctions,"
Applied Economics Letters,
Taylor & Francis Journals, vol. 14(3), pages 157-161.
- David E. Giles, 2005. "Benford’s Law and Naturally Occurring Prices in Certain ebaY Auctions," Econometrics Working Papers 0505, Department of Economics, University of Victoria.
- Daniel S. Hamermesh, 2007.
"Replication in Economics,"
NBER Working Papers
13026, National Bureau of Economic Research, Inc.
- B. D. McCullough & H. D. Vinod, 2003. "Verifying the Solution from a Nonlinear Solver: A Case Study," American Economic Review, American Economic Association, vol. 93(3), pages 873-892, June.
- Andreas Diekmann, 2007.
"Not the First Digit! Using Benford's Law to Detect Fraudulent Scientif ic Data,"
Journal of Applied Statistics,
Taylor & Francis Journals, vol. 34(3), pages 321-329.
- Andreas Diekmann, 2005. "Not the First Digit! Using Benford’s Law to Detect Fraudulent Scientific Data," Others 0507001, EconWPA.
- McCullough, B. D. & McGeary, Kerry Anne & Harrison, Teresa D., 2006. "Lessons from the JMCB Archive," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 38(4), pages 1093-1107, June.
- Michael Graber & Andrey Launov & Klaus Wälde, 2008. "Publish or Perish? The Increasing Importance of Publications for Prospective Economics Professors in Austria, Germany and Switzerland," German Economic Review, Verein für Socialpolitik, vol. 9, pages 457-472, November.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- How an arcane statistical law could have prevented the Greek disaster
by mueller2 in Economics Intelligence on 2011-07-28 07:37:06
- Benford's Law: using stats to bust an entire nation for naughtiness
by Ben Goldacre in Bad Science on 2011-09-23 16:30:00
- Joerg-Peter Schraepler, 2011.
"Benford’s Law as an Instrument for Fraud Detection in Surveys Using the Data of the Socio-Economic Panel (SOEP),"
Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik),
Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 231(5-6), pages 685-718, November.
- Jörg-Peter Schräpler, 2010. "Benford's Law As an Instrument for Fraud Detection in Surveys Using the Data of the Socio-Economic Panel (SOEP)," SOEPpapers on Multidisciplinary Panel Data Research 273, DIW Berlin, The German Socio-Economic Panel (SOEP).
- Johannes Bauer & Jochen Gross, 2011. "Difficulties Detecting Fraud? The Use of Benford’s Law on Regression Tables," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 231(5-6), pages 733-748, November.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.