Benford’s Law and Macroeconomic Data Quality
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Summary:
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.
Series:
Working Paper No. 2009/010
Subject:
Balance of payments statistics Currencies Economic and financial statistics Government finance statistics Gross fixed investment Money National accounts
English
Publication Date:
January 1, 2009
ISBN/ISSN:
9781451871579/1018-5941
Stock No:
WPIEA2009010
Pages:
22
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