2015
DOI: 10.19030/iber.v14i6.9489
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What Benford Can Tell Us About Cover Pools – An Empirical Analysis

Abstract: Leading digits often follow a distribution described by Newcomb (1881) and Benford (1938). We apply this phenomenon known as Benford’s Law on cover assets provided by issuers of German covered bonds. The main finding of the empirical analysis is that leading digits of these assets seem to follow the Benford distribution. Standard statistical evidence, however, might be misleading due to effects of large data sets. Consequently, the present paper also provides an example of how to deal with large data sets when… Show more

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“…According to the literature, we did not use those tests (e.g., χ 2 and the Kuiper’s statistic) that are extremely sensitive in rejecting the null hypothesis (being a distribution Benford-like) for large samples ( 4 , 11 13 ). To test the goodness of fit, we used the following tests: r : the Pearson correlation.…”
Section: Methodsmentioning
confidence: 99%
“…According to the literature, we did not use those tests (e.g., χ 2 and the Kuiper’s statistic) that are extremely sensitive in rejecting the null hypothesis (being a distribution Benford-like) for large samples ( 4 , 11 13 ). To test the goodness of fit, we used the following tests: r : the Pearson correlation.…”
Section: Methodsmentioning
confidence: 99%