The contrast of fraud in international trade is a crucial task of modern economic regulations. We develop statistical tools for the detection of frauds in customs declarations that rely on the Newcomb-Benford law for significant digits. Our first contribution is to show the features, in the context of a European Union market, of the traders for which the law should hold in the absence of fraudulent data manipulation. Our results shed light on a relevant and debated question, since no general known theory can exactly predict validity of the law for genuine empirical data. We also provide approximations to the distribution of test statistics when the Newcomb-Benford law does not hold. These approximations open the door to the development of modified goodness-of-fit procedures with wide applicability and good inferential properties.

Newcomb-Benford law and the detection of frauds in international trade / Cerioli, Andrea; Barabesi, Lucio; Cerasa, Andrea; Menegatti, Mario; Perrotta, Domenico. - In: PROCEEDINGS OF THE NATIONAL ACADEMY OF SCIENCES OF THE UNITED STATES OF AMERICA. - ISSN 0027-8424. - 116:1(2019), pp. 106-115. [10.1073/pnas.1806617115]

Newcomb-Benford law and the detection of frauds in international trade

Cerioli, Andrea
;
CERASA, ANDREA;Menegatti, Mario;Perrotta, Domenico
2019-01-01

Abstract

The contrast of fraud in international trade is a crucial task of modern economic regulations. We develop statistical tools for the detection of frauds in customs declarations that rely on the Newcomb-Benford law for significant digits. Our first contribution is to show the features, in the context of a European Union market, of the traders for which the law should hold in the absence of fraudulent data manipulation. Our results shed light on a relevant and debated question, since no general known theory can exactly predict validity of the law for genuine empirical data. We also provide approximations to the distribution of test statistics when the Newcomb-Benford law does not hold. These approximations open the door to the development of modified goodness-of-fit procedures with wide applicability and good inferential properties.
2019
Newcomb-Benford law and the detection of frauds in international trade / Cerioli, Andrea; Barabesi, Lucio; Cerasa, Andrea; Menegatti, Mario; Perrotta, Domenico. - In: PROCEEDINGS OF THE NATIONAL ACADEMY OF SCIENCES OF THE UNITED STATES OF AMERICA. - ISSN 0027-8424. - 116:1(2019), pp. 106-115. [10.1073/pnas.1806617115]
File in questo prodotto:
File Dimensione Formato  
CBCMP_Paper_PNAS18.pdf

accesso aperto

Tipologia: Versione (PDF) editoriale
Licenza: Creative commons
Dimensione 852.63 kB
Formato Adobe PDF
852.63 kB Adobe PDF Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11381/2853849
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 46
  • ???jsp.display-item.citation.isi??? 35
social impact