Exploring the Law of Numbers: Evidence from China's Real Estate

TL;DR

This paper investigates the distribution and characteristics of numbers in China's real estate financial data, expanding beyond Benford's Law to analyze frequency and length for deeper numerical insights.

Contribution

It introduces a comprehensive analysis of number laws in financial statements, extending beyond first digit analysis to include frequency and length dimensions.

Findings

Numbers exhibit diverse distribution patterns beyond Benford's Law.

Analysis reveals insights into data manipulation and number usage.

Study enhances understanding of numerical phenomena in economic data.

Abstract

The renowned proverb, Numbers do not lie, underscores the reliability and insight that lie beneath numbers, a concept of undisputed importance, especially in economics and finance etc. Despite the prosperity of Benford's Law in the first digit analysis, its scope fails to remain comprehensiveness when it comes to deciphering the laws of number. This paper delves into number laws by taking the financial statements of China real estate as a representative, quantitatively study not only the first digit, but also depict the other two dimensions of numbers: frequency and length. The research outcomes transcend mere reservations about data manipulation and open the door to discussions surrounding number diversity and the delineation of the usage insights. This study wields both economic significance and the capacity to foster a deeper comprehension of numerical phenomena.