In a trial, the defendant was accused of issuing checks to a nonexistent vendor. The amounts of the checks are listed in the accompanying data table in order by row. When testing for goodness-of-fit with the proportions expected with Benford's law, it is necessary to combine categories because not all expected values are at least 5. Use one category with leading digits of 1, a second category with leading digits of 2, 3, 4, 5, and a third category with leading digits of 6, 7, 8, 9. Using a
0.05
significance level, is there sufficient evidence to conclude that the leading digits on the checks do not conform to Benford's law?
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The amounts of the checks |
Data table
|
|||
$01,595.45 |
$23,403.75 |
$29,397.82 |
$30,175.03 |
$37,471.29 |
$43,099.96 |
$43,639.87 |
$47,192.88 |
$57,810.09 |
$66,514.51 |
$70,513.56 |
$71,774.76 |
$75,638.21 |
$75,800.54 |
$79,270.14 |
$80,934.71 |
$85,060.72 |
$85,260.12 |
$86,736.15 |
$89,952.41 |
$93,277.33 |
$93,774.29 |
According to Benford's law, a variety of different data sets include numbers with leading (first) digits that follow the distribution shown in the table below.
Leading Digit |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
|
---|---|---|---|---|---|---|---|---|---|---|
Benford's law: |
30.1% |
17.6% |
12.5% |
9.7% |
7.9% |
6.7% |
5.8% |
5.1% |
4.6% |
|
distribution of leading digits |
Find the test static, P-value, critical value , x to the power 2
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