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Sunday, June 5, 2011

Benford's Law

Wikipedia - Benford's Law

This bizarre mathematical theory suggests that the numbers you encounter in the everyday world might have some hidden patterns in everything from your electricity bill, to your street address, to your license plate number.

From Wikipedia: "According to this law, the first digit is 1 about 30% of the time, and larger digits occur as the leading digit with lower and lower frequency, to the point where 9 as a first digit occurs less than 5% of the time. This distribution of first digits is the same as the widths of gridlines on the logarithmic scale."

This particular law is used to spot all kinds of financial fraud, as those who are making up numbers tend to do so following a uniform distribution. There are probabilities at work all around us, if you look for them you will be surprised at the degree in which they determine our lives.