IDEAS home Printed from https://ideas.repec.org/a/spr/annopr/v342y2024i3d10.1007_s10479-023-05739-y.html
   My bibliography  Save this article

Testing benford and universal laws on gambling and betting data in Romania

Author

Listed:
  • Ionel Jianu

    (Bucharest University of Economic Studies)

  • Alexandru Isaic-Maniu

    (Romanian Academy)

  • Claudiu Brandas

    (West University of Timisoara)

  • Marian Pompiliu Cristescu

    (“Lucian Blaga” University Sibiu)

  • Corneliu Bente

    (University of Oradea)

  • Claudiu Herteliu

    (Bucharest University of Economic Studies
    Babes-Bolyai University of Cluj-Napoca)

Abstract

This study examines the integrity of financial statements within the Romanian gambling and betting industry, employing Benford's, Zipf’s and Universal Law and distribution distances tests. Data from the financial statements of active gambling and betting companies in 2013, classified under NACE code 9200, were analysed The primary focus was on the absolute values of declared gross profit or loss. Our analysis involved visual inspections, Chi-square tests, and the application of Zipf’s and Universal laws for distribution conformity. Results indicated that the empirical distributions of the first and second digits, as well as the combined first two digits of gross profit or loss, align with Benford's Law. Surprisingly, the distribution did not conform to the expected Zipf’s type but instead followed the specific pattern of the Universal law. Furthermore, while the Zipf’s model was not a fit, the Universal law effectively captured the distribution of the reported financial data, suggesting a power-law concentration of gross profit values in the industry.

Suggested Citation

  • Ionel Jianu & Alexandru Isaic-Maniu & Claudiu Brandas & Marian Pompiliu Cristescu & Corneliu Bente & Claudiu Herteliu, 2024. "Testing benford and universal laws on gambling and betting data in Romania," Annals of Operations Research, Springer, vol. 342(3), pages 1765-1779, November.
    • Handle: RePEc:spr:annopr:v:342:y:2024:i:3:d:10.1007_s10479-023-05739-y
    DOI: 10.1007/s10479-023-05739-y
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10479-023-05739-y
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10479-023-05739-y?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Marcel Ausloos & Roy Cerqueti, 2016. "A Universal Rank-Size Law," PLOS ONE, Public Library of Science, vol. 11(11), pages 1-15, November.
    2. Leo Egghe & Raf Guns, 2012. "Applications of the generalized law of Benford to informetric data," Journal of the American Society for Information Science and Technology, Association for Information Science & Technology, vol. 63(8), pages 1662-1665, August.
    3. Giuseppina Talamo & Giovanni Manuguerra, 2016. "The gambling sector: A socio-economic analysis of the case of Italy," Eastern European Business and Economics Journal, Eastern European Business and Economics Studies Centre, vol. 2(4), pages 315-330.
    4. Reed, William J., 2001. "The Pareto, Zipf and other power laws," Economics Letters, Elsevier, vol. 74(1), pages 15-19, December.
    5. Tariq Ahmad Mir & Marcel Ausloos & Roy Cerqueti, 2014. "Benford's law predicted digit distribution of aggregated income taxes: the surprising conformity of Italian cities and regions," Papers 1410.2890, arXiv.org.
    6. Stanley, Michael H. R. & Buldyrev, Sergey V. & Havlin, Shlomo & Mantegna, Rosario N. & Salinger, Michael A. & Eugene Stanley, H., 1995. "Zipf plots and the size distribution of firms," Economics Letters, Elsevier, vol. 49(4), pages 453-457, October.
    7. Leo Egghe & Raf Guns, 2012. "Applications of the generalized law of Benford to informetric data," Journal of the Association for Information Science & Technology, Association for Information Science & Technology, vol. 63(8), pages 1662-1665, August.
    8. Belinda C. Goodwin & Matthew Browne & Matthew Rockloff & Judy Rose, 2017. "A typical problem gambler affects six others," International Gambling Studies, Taylor & Francis Journals, vol. 17(2), pages 276-289, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Whyman, G. & Ohtori, N. & Shulzinger, E. & Bormashenko, Ed., 2016. "Revisiting the Benford law: When the Benford-like distribution of leading digits in sets of numerical data is expectable?," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 461(C), pages 595-601.
    2. M. Jayasree & C. S. Pavana Jyothi & P. Ramya, 2018. "Benford’s Law and Stock Market—The Implications for Investors: The Evidence from India Nifty Fifty," Jindal Journal of Business Research, , vol. 7(2), pages 103-121, December.
    3. Hsiang-chi Tseng & Wei-neng Huang & Ding-wei Huang, 2017. "Modified Benford’s law for two-exponent distributions," Scientometrics, Springer;Akadémiai Kiadó, vol. 110(3), pages 1403-1413, March.
    4. Ausloos, Marcel, 2020. "Rank–size law, financial inequality indices and gain concentrations by cyclist teams. The case of a multiple stage bicycle race, like Tour de France," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 540(C).
    5. Akhundjanov, Sherzod B. & Devadoss, Stephen & Luckstead, Jeff, 2017. "Size distribution of national CO2 emissions," Energy Economics, Elsevier, vol. 66(C), pages 182-193.
    6. Ausloos, Marcel & Cerqueti, Roy & Lupi, Claudio, 2017. "Long-range properties and data validity for hydrogeological time series: The case of the Paglia river," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 470(C), pages 39-50.
    7. Jakub Growiec & Fabio Pammolli & Massimo Riccaboni, 2020. "Innovation and Corporate Dynamics: A Theoretical Framework," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 12(1), pages 1-45, March.
    8. Mundt, Philipp & Alfarano, Simone & Milaković, Mishael, 2020. "Exploiting ergodicity in forecasts of corporate profitability," Journal of Economic Dynamics and Control, Elsevier, vol. 111(C).
    9. Xavier Gabaix, 2009. "Power Laws in Economics and Finance," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 255-294, May.
    10. Druică, Elena & Oancea, Bogdan & Vâlsan, Călin, 2018. "Benford's law and the limits of digit analysis," International Journal of Accounting Information Systems, Elsevier, vol. 31(C), pages 75-82.
    11. Mir, T.A., 2014. "The Benford law behavior of the religious activity data," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 408(C), pages 1-9.
    12. Cerqueti, Roy & Lupi, Claudio & Pietrovito, Filomena & Pozzolo, Alberto Franco, 2022. "Rank–size distributions for banks: A cross-country analysis," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 585(C).
    13. Barabesi, Lucio & Pratelli, Luca, 2020. "On the Generalized Benford law," Statistics & Probability Letters, Elsevier, vol. 160(C).
    14. Ji, Guseon & Dai, Bingcun & Park, Sung-Pil & Ahn, Kwangwon, 2020. "The origin of collective phenomena in firm sizes," Chaos, Solitons & Fractals, Elsevier, vol. 136(C).
    15. de Wit, Gerrit, 2005. "Firm size distributions: An overview of steady-state distributions resulting from firm dynamics models," International Journal of Industrial Organization, Elsevier, vol. 23(5-6), pages 423-450, June.
    16. Behzod B. Ahundjanov & Sherzod B. Akhundjanov & Botir B. Okhunjanov, 2022. "Power law in COVID‐19 cases in China," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 185(2), pages 699-719, April.
    17. Egghe, L., 2013. "The functional relation between the impact factor and the uncitedness factor revisited," Journal of Informetrics, Elsevier, vol. 7(1), pages 183-189.
    18. Devadoss, Stephen & Luckstead, Jeff & Danforth, Diana & Akhundjanov, Sherzod, 2016. "The power law distribution for lower tail cities in India," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 442(C), pages 193-196.
    19. Alexandre Donizeti Alves & Horacio Hideki Yanasse & Nei Yoshihiro Soma, 2014. "Benford’s Law and articles of scientific journals: comparison of JCR® and Scopus data," Scientometrics, Springer;Akadémiai Kiadó, vol. 98(1), pages 173-184, January.
    20. Petra Štamfestová & Lukáš Sobíšek & Jiří Hnilica, 2023. "Firm Size Distribution in the Central European Context," Central European Business Review, Prague University of Economics and Business, vol. 2023(5), pages 151-175.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:annopr:v:342:y:2024:i:3:d:10.1007_s10479-023-05739-y. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.