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Benford's Law and Fraud Detection. Facts and Legends

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Author Info

  • Andreas Diekmann

    ()

  • Ben Jann

    ()

Abstract

Is Benford's law a good instrument to detect fraud in reports of statistical and scientific data? For a valid test the probability of "false positives" and "false negatives" has to be low. However, it is very doubtful whether the Benford distribution is an appropriate tool to discriminate between manipulated and non-manipulated estimates. Further research should focus more on the validity of the test and test results should be interpreted more carefully.

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File URL: http://repec.ethz.ch/ets/papers/diekmann_jann_benford_2010.pdf
File Function: First version, 2010
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Bibliographic Info

Paper provided by ETH Zurich, Chair of Sociology in its series ETH Zurich Sociology Working Papers with number 8.

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Length: 8 pages
Date of creation: 06 Feb 2010
Date of revision:
Handle: RePEc:ets:wpaper:8

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Web page: http://www.socio.ethz.ch/

For corrections or technical questions regarding this item, or to correct its listing, contact: (Ben Jann).

Related research

Keywords: Benford's law; fraud detection; false positive; false negative; regression coefficients;

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References

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  1. Dewald, William G & Thursby, Jerry G & Anderson, Richard G, 1986. "Replication in Empirical Economics: The Journal of Money, Credit and Banking Project," American Economic Review, American Economic Association, vol. 76(4), pages 587-603, September.
  2. Andreas Diekmann, 2007. "Not the First Digit! Using Benford's Law to Detect Fraudulent Scientif ic Data," Journal of Applied Statistics, Taylor and Francis Journals, vol. 34(3), pages 321-329.
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Cited by:
  1. Bernhard Rauch & Max Göttsche & Gernot Brähler & Stefan Engel, 2011. "Fact and Fiction in EU‐Governmental Economic Data," German Economic Review, Verein für Socialpolitik, vol. 12(3), pages 243-255, 08.
  2. Susumu Shikano & Verena Mack, 2011. "When Does the Second-Digit Benford’s Law-Test Signal an Election Fraud? Facts or Misleading Test Results," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 231(5-6), pages 719-732, November.

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