8 Benford's Law as a potential measure of cost bias

If we were to ask someone to predict which leading digit occurs the most often in a large collection of numbers in a table or a database such as a detailed cost statement or project cost ledger, that person may intuitively answer ‘None of them; they will all occur equally as often’, or that person may just take a random guess. In all probability, that person would be wrong. The answer is 1.

American Astronomer Stuart Newcomb (1881) was the first to document the phenomenon. He noticed that the pages containing the lower values in a set of logarithmic tables were grubbier, or more well-thumbed, than those for the higher numbers. He quantified the relationship first in what must quite literally ...

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