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

Qiuzi Fu, Sofia Villas-Boas and George Judge ()

Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series from Department of Agricultural & Resource Economics, UC Berkeley

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.

Keywords: First significant digits; Benford's law; information theoretic methods; empirical likelihood; minimum divergence measure; adaptive behavior; causal entropy maximization; Applied Economics (search for similar items in EconPapers)
Date: 2019-01-02
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