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Does china income FSDs follow Benford? A comparison between Chinese income first significant digit distribution with Benford distribution

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  • Qiuzi Fu
  • Sofia B. Villas-Boas
  • George Judge

Abstract

Since Benford’s law is an empirical phenomenon that occurs in a range of data sets, this raises the question as to whether or not the same thing might be true in terms of the Chinese income distribution data. We focus on the first significant digit (FSD) distribution of Chinese micro income data from the 2005 Inter-Census sample, which corresponds to 1% of Chinese population and other micro income data from the China family panel studies (CFPS) and Chinese General Social Survey (CGSS). We use information theoretic-entropy based methods to investigate the degree to which Benford’s FSD law is consistent with the FSD of Chinese income data and our findings suggest consistency between the Chinese FSD income distribution and Benford’s distribution. The close connection between the two distributions has implications for the quality of the sample of Chinese micro data.

Suggested Citation

  • Qiuzi Fu & Sofia B. Villas-Boas & George Judge, 2019. "Does china income FSDs follow Benford? A comparison between Chinese income first significant digit distribution with Benford distribution," China Economic Journal, Taylor & Francis Journals, vol. 12(1), pages 68-76, January.
    • Handle: RePEc:taf:rcejxx:v:12:y:2019:i:1:p:68-76
    DOI: 10.1080/17538963.2018.1477418
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    1. Tam Cho, Wendy K. & Gaines, Brian J., 2007. "Breaking the (Benford) Law: Statistical Fraud Detection in Campaign Finance," The American Statistician, American Statistical Association, vol. 61, pages 218-223, August.
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