
Benford's Law - mixmax
http://www.rexswain.com/benford.html
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ggchappell
It is interesting to consider how effects like this operate at different
levels.

For example, if I picked up a coin, flipped it 6 times, and got heads each
time, then I might reasonably be suspicious about the coin. On the other hand,
when someone claims to have flipped a coin 200 times, it is the ones who never
get 6 in a row that are suspect.

Similarly, a tax return that does not have numbers beginning with 1 is
certainly suspicious. On the other hand, if you gave me a million tax returns,
and _all_ of them had lots of numbers beginning with 1, then I would be
suspicious of the collection as a whole. Benford's Law deals only with
probabilities, after all; we should expect some deviations from what it
predicts.

Given the sizes of data sets that governments deal with, the ideas outlined in
this article can certainly be useful. However, the virtual certainty of false
positives is something that also needs to be dealt with. It is to be greatly
hoped that these ideas are implemented in the context of human wisdom and
manual fact checking, and not merely as a yes/no way of determining who gets
treated like a criminal.

In any case, this was a thought-provoking article. Thanks for posting.

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Tangurena
I have a copy of Nigrini's book. I've tried getting copies for my company, but
other than the occasional $200+ used copy on Amazon, it appears like this book
isn't just "out of print" but withdrawn from the market (the publisher sells
training now, not books that anyone can read).

[http://www.amazon.com/Digital-analysis-using-Benfords-
Law/dp...](http://www.amazon.com/Digital-analysis-using-Benfords-
Law/dp/B0006RJJRC/)

<http://www.nigrini.com/data_analysis_books.htm>

