Other fun I've had with Benford's Law.<p>1. Spotting odd things in MPs' expenses: <a href="http://blog.jgc.org/2009/06/its-probably-worth-testing-mps.html" rel="nofollow">http://blog.jgc.org/2009/06/its-probably-worth-testing-mps.h...</a><p>2. Spotting odd things in BBC executives' expenses: <a href="http://blog.jgc.org/2009/06/running-numbers-on-bbc-executives.html" rel="nofollow">http://blog.jgc.org/2009/06/running-numbers-on-bbc-executive...</a><p>3. The Iranian election: <a href="http://blog.jgc.org/2009/06/benfords-law-and-iranian-election.html" rel="nofollow">http://blog.jgc.org/2009/06/benfords-law-and-iranian-electio...</a><p>4. New Age mumbo jumbo: <a href="http://www.jgc.org/blog/2008/02/any-sufficiently-simple-explanation-is.html" rel="nofollow">http://www.jgc.org/blog/2008/02/any-sufficiently-simple-expl...</a>
Benford's law would not have stopped the groupthink, willful ignorance and corruption which actually drove the Greek disaster. It's not like Greece's problem with tax collection was a well-kept secret, it's just that nobody wanted to face the facts.
The Tim Harford article mentioned in this submission was submitted and discussed a couple of days ago:<p><a href="http://news.ycombinator.com/item?id=3008848" rel="nofollow">http://news.ycombinator.com/item?id=3008848</a><p>The similarly mentioned Ben Goldacre article was also submitted, but that got no discussion:<p><a href="http://news.ycombinator.com/item?id=3007964" rel="nofollow">http://news.ycombinator.com/item?id=3007964</a><p>A detailed discussion by Terry Tao of Benford's Law (and more) can be found here:<p><a href="http://terrytao.wordpress.com/2009/07/03/benfords-law-zipfs-law-and-the-pareto-distribution/" rel="nofollow">http://terrytao.wordpress.com/2009/07/03/benfords-law-zipfs-...</a>
The issue with using Benford's Law with analysis is that as soon as people realize that you're using it, data can easily be manipulated to make it compatible.<p>The previous article by Tim Harford mentioned that Madoff's financial data was Benford compatible.
So I doubt that using it would have actually prevented the Greek or any other disaster.
Nice geek porn, but the title and the premise is basically nonsense.<p>EU politicians knew for many years that Greece was scamming things. Maybe not so much when the Euro started, but well before it all blew up. All kinds of circumstances, however (such as the need for Greece's vote on some other hot issue of the moment) made sure that no one had the will to really do something about it.<p>Statistics is nice and dandy, but it doesn't help a dime in fixing the broken mess that is EU politics.<p>ps. Fun trivia: if the EU applied for EU membership, it wouldn't get in because it's too undemocratic.
It's nice that they made sure the data set contained the key data to their collapse. The pensions of retirees. Would the results have been the same if it weren't included? I don't have access to the paper but I'd be curious what their justification for their choice was.<p>Among other things, they looked at the total level of debt, the cash reserves of the government and the pensions of retired civil servants.
Radiolabs had a segment dedicated to such analysis. It appears the IRS/accountants use Benford law patterns to audit tax evaders.<p><a href="http://www.radiolab.org/2009/nov/30/from-benford-to-erdos/" rel="nofollow">http://www.radiolab.org/2009/nov/30/from-benford-to-erdos/</a>
The article says:<p>> According to statisticians, it is almost impossible to manipulate data in a way that a certain outcome is guaranteed and Benford’s Law is met at the same time. Hence, tax authorities in several countries are using Benford’s Law as a default testing device.<p>I'd be very interested in evidence to support this. This doesn't sound correct. "Almost impossible?"
Come on, this is not even a real law, and the data are really shaky to justify the title of this post. 5% significance threshold means that Luxembourg or Austria satisfy the criteroa. So what? The EU is a large political organization, not a NYSE index. The real trouble for greece is not the fake accession data (Italy had similarly manipulated data), but the squandering of public money that followed.<p>I get it, geeks love to play with empirical laws, but this paper is at best interesting trivia. I could go on analyzing what could really prevent the disaster forever ...