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Mir, TA, Ausloos, M and Cerqueti, R (2014)

Benfordís law predicted digit distribution of aggregated income taxes: the surprising conformity of Italian cities and regions

Eur. Phys. J. B (2014) 87: 261.

ISSN/ISBN: 1434-6028 DOI: 10.1140/epjb/e2014-50525-2



Abstract: The yearly aggregated tax income data of all, more than 8000, Italian municipalities are analyzed for a period of five years, from 2007 to 2011, to search for conformity or not with Benfordís law, a counterintuitive phenomenon observed in large tabulated data where the occurrence of numbers having smaller initial digits is more favored than those with larger digits. This is done in anticipation that large deviations from Benfordís law will be found in view of tax evasion supposedly being widespread across Italy. Contrary to expectations, we show that the overall tax income data for all these years is in excellent agreement with Benfordís law. Furthermore, we also analyze the data of Calabria, Campania and Sicily, the three Italian regions known for strong presence of mafia, to see if there are any marked deviations from Benfordís law. Again, we find that all yearly data sets for Calabria and Sicily agree with Benfordís law whereas only the 2007 and 2008 yearly data show departures from the law for Campania. These results are again surprising in view of underground and illegal nature of economic activities of mafia which significantly contribute to tax evasion. Some hypothesis for the found conformity is presented


Bibtex:
@article{ year={2014}, issn={1434-6028}, journal={The European Physical Journal B}, eid={261}, volume={87}, number={11}, doi={10.1140/epjb/e2014-50525-2}, title={Benford's law predicted digit distribution of aggregated income taxes: the surprising conformity of Italian cities and regions}, url={http://dx.doi.org/10.1140/epjb/e2014-50525-2}, publisher={Springer Berlin Heidelberg}, keywords={Statistical and Nonlinear Physics}, author={Mir, Tariq Ahmad and Ausloos, Marcel and Cerqueti, Roy}, language={English} }


Reference Type: Journal Article

Subject Area(s): Economics