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Benford’s Law and Macroeconomic Data Quality
Author:
Mr. Jesus R Gonzalez-Garcia
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Mr. Gonzalo C Pastor Campos
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Series:
IMF Working Papers
Volume/Issue:
Volume 2009: Issue 010
Language:
English
Publication Date:
01 Jan 2009
DOI:
https://doi.org/10.5089/9781451871579.001
ISBN:
9781451871579
ISSN:
1018-5941
Pages:
22
Keywords:
WP; number; digit; nominal GDP; statistics; Benford’s law; first-digit phenomenon; transparency; data quality; data errors; data dissemination ROSC; data ROSCs; balance of payments statistics data; digit law; macroeconomic data; data accuracy; Currencies; Gross fixed investment; Government finance statistics; Balance of payments statistics; East Asia; Middle East; Western Hemisphere; Central Asia; Central and Eastern Europe
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund