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Power Laws, Prices and National Accounts: Are There Any Irregularities?

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  • Pater, Ciprian Florin
  • Mazrekaj, Deni

    (University of Oxford)

Abstract

Many economic regularities have been found to adhere to power laws. In this paper, we apply Benford’s law to consumer price index data from Norway and Zipf’s law on a Norwegian report about the history of Norwegian national accounts. Norway is a particularly interesting country to study as it scores among the highest-ranked countries on data quality. We find that the consumer price index adheres to Benford’s law, showing high data quality. On the other hand, our results do indicate that the report does not adhere to Zipf’s law.

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  • Pater, Ciprian Florin & Mazrekaj, Deni, 2020. "Power Laws, Prices and National Accounts: Are There Any Irregularities?," SocArXiv gwha2, Center for Open Science.
    • Handle: RePEc:osf:socarx:gwha2
    DOI: 10.31219/osf.io/gwha2
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    References listed on IDEAS

    as
    1. Carlos M. Urzúa, 2020. "A simple test for power-law behavior," Stata Journal, StataCorp LP, vol. 20(3), pages 604-612, September.
    2. Xavier Gabaix, 2009. "Power Laws in Economics and Finance," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 255-294, May.
    3. Martín Haro & Joan Serrà & Perfecto Herrera & Álvaro Corral, 2012. "Zipf's Law in Short-Time Timbral Codings of Speech, Music, and Environmental Sound Signals," PLOS ONE, Public Library of Science, vol. 7(3), pages 1-10, March.
    4. George Judge & Laura Schechter, 2009. "Detecting Problems in Survey Data Using Benford’s Law," Journal of Human Resources, University of Wisconsin Press, vol. 44(1).
    5. Arshad, Sidra & Hu, Shougeng & Ashraf, Badar Nadeem, 2018. "Zipf’s law and city size distribution: A survey of the literature and future research agenda," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 492(C), pages 75-92.
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