https://park.is/categories/accounting/Recent content in Accounting on Ye Joo Park's BlogHugoen-USSat, 10 Feb 2024 00:00:00 +0000https://park.is/notebooks/benfords-analysis/Sat, 10 Feb 2024 00:00:00 +0000https://park.is/notebooks/benfords-analysis/<div class="cell border-box-sizing text_cell rendered" id="cell-id=94818c56-0367-444d-bfc4-7d7d05296165" > <div class="prompt input_prompt"></div> <div class="inner_cell"> <div class="text_cell_render border-box-sizing rendered_html"> <p> Benford's Law, also known as the Newcomb-Benford law or the first-digit law, is a surprising observation about the leading digits of numbers in real-world datasets. In many naturally occurring collections of data, smaller leading digits (like 1 and 2) are significantly more common than larger ones (like 8 and 9). </p> <ul> <li>Financial records</li> <li>Scientific measurements</li> <li>Astronomical distances</li> <li>Street addresses</li> </ul> <h3 id="Why-does-this-happen?"> Why does this happen?<a class="anchor-link" href="#Why-does-this-happen?" >¶</a > </h3> <p> Real-world data often involves growth, multiplication, and comparisons across different scales. This "scaling invariance" creates a natural bias towards smaller leading digits. </p>