1 / 11

Benford’s Law

Benford’s Law. Probability & Statistic. Keyang He. History. 1881: Simon Newcomb noticed that the early pages of log table books were more grubby than the later pages. History. If the first digit is d, then the probability of occurrence of the first digit is Log 10 (1 + 1/d) . History.

adora
Download Presentation

Benford’s Law

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Benford’s Law Probability & Statistic Keyang He

  2. History • 1881: Simon Newcomb noticed that the early pages of log table books were more grubby than the later pages

  3. History • If the first digit is d, then the probability of occurrence of the first digit is Log10 (1 + 1/d)

  4. History • 1938: Physicist Frank Benford rediscovered Newcomb’s formula: Log10 (1+1/d)

  5. History • 1995: While Benford's law unquestionably applies to many situations in the real world, a satisfactory explanation has been given through the work of Theodore Hill.

  6. History • In 1992, Mark Nigrini published a thesis noting that Benford’s Law could be used to detect fraud.

  7. Caution • Because human choices are not random, invented numbers are unlikely to follow Benford’s Law, when people invent numbers, their digit patterns will cause the data set to appear unnatural.

  8. Types of Data That Conform

  9. Types of Data That Do Not Conform

  10. Summary • Benford’s Law provides a data analysis method that can help alert us to possible errors, biases, potential fraud, costly processing inefficiencies or other irregularities.

  11. Resources • http://mathworld.wolfram.com/BenfordsLaw.html • http://www.isaca.org/Journal/Past-Issues/2011/Volume-3/Pages/Understanding-and-Applying-Benfords-Law.aspx

More Related