Vol. 15 No. 1 (2026)
Original Research Article

Data Irregularities in Wine Sector Statistics: A Benford’s Law Approach to the Portuguese Case

PDF
  • Piotr Luty,
  • Hana Bohušová
Piotr Luty
Wroclaw University of Economics and Business, Komandorska 118/120, 53-345 Wroclaw, Poland
Hana Bohušová
Ambis University, Lindnerova 575/1, 180 00 Praha 8 – Libeň, Czech Republic
DOI: https://doi.org/10.36253/wep-17713

Published 2026-02-16

Keywords

  • Wine production,
  • Benford's Law,
  • reporting

How to Cite

Luty, P., & Bohušová, H. (2026). Data Irregularities in Wine Sector Statistics: A Benford’s Law Approach to the Portuguese Case. Wine Economics and Policy, 15(1), 61–72. https://doi.org/10.36253/wep-17713

Copyright (c) 2026 Piotr Luty, Hana Bohušová

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

The wine industry plays an important role in many national economies, it combines agricultural production with cultural heritage and global trade. In Portugal, it contributes significantly to economic value, regional identity, and rural sustainability. As international wine markets become increasingly complex, the information from financial and production data is essential for regulation, policymaking, and economic analysis. Despite the growing emphasis on viticulture and market dynamics, the wine sector data anomalies have attracted only limited attention so far. This study introduces Benford’s Law – a statistical method used to detect irregularities in naturally occurring datasets. Applying first- and second-digit Benford’s Law tests to Portuguese wine industry data from 2014 to 2023, which includes company-level financial statements and wine production figures, the analysis reveals data irregularities. Nonconformity between empirical data and theoretical expectations refers to wine must production data and profit before tax. The irregularities must be explained in a further and more detailed survey. The study offers a novel application of Benford’s Law in the wine sector.

PDF

References

  1. P. de Vries and A.J. Murk, “Compliance of LC50 and NOEC data with Benford’s Law: An indication of reliability?,” Ecotoxicology and Environmental Safety, vol. 98, pp. 171–178, 2013, https://doi.org/10.1016/j.ecoenv.2013.09.002.
  2. M.J. Nigrini, Benford’s law: Applications for forensic accounting, auditing, and fraud detection. 2012. https://doi.org/10.1002/9781119203094.
  3. O. Ashenfelter and K. Storchmann, “Climate Change and Wine: A Review of the Economic Implications,” Journal of Wine Economics, vol. 11, no. 1, pp. 105–138, 2016, https://doi.org/10.1017/jwe.2016.5.
  4. G.V. Jones, E.J. Edwards, M. Bonada, et al., “17 - Climate change and its consequences for viticulture,” in A.G. Reynolds, ed. Managing Wine Quality (Second Edition), Woodhead Publishing, 2022, pp. 727–778. https://doi.org/10.1016/B978-0-08-102067-8.00015-4.
  5. N.B. Behmiri, L. Correia, and S. Gouveia, “Drivers of wine production in the European Union: a macroeconomic perspective,” New Medit, vol. 18, no. 3, pp. 85–96, 2019, https://doi.org/10.30682/nm1903g.
  6. B.J. Rickard, Gergaud ,Olivier, Ho ,Shuay-Tsyr, et al., “Trade liberalization in the presence of domestic regulations: public policies applied to EU and U.S. wine markets,” Applied Economics, vol. 50, no. 18, pp. 2028–2047, Apr. 2018, https://doi.org/10.1080/00036846.2017.1386278.
  7. N. Sequeira, M. Mota, R. Costa, et al., “The Influence of the COVID-19 Crisis on Financial Statements Manipulations in the Portuguese Wine and Tourism Sector,” in A. Abreu, J.V. Carvalho, P. Liberato, et al., eds. Advances in Tourism, Technology and Systems, Singapore: Springer Nature, 2024, pp. 483–493. https://doi.org/10.1007/978-981-99-9765-7_42.
  8. , Wine Globalization: A New Comparative History. Cambridge: Cambridge University Press, 2018. https://doi.org/10.1017/9781108131766.
  9. S.M. Loose and R. del Rey, “State of the International Wine Markets in 2023. The wine market at a crossroads: Temporary or structural challenges?,” Wine Economics and Policy, vol. 13, no. 2, pp. 3–14, Sept. 2024, https://doi.org/10.36253/wep-16395.
  10. J. Katunar, M. Grdinić, and D. Maradin, “EU Tax and Agricultural Policy in the Wine Sector,” in B. Olgić Draženović, V. Buterin, and S. Suljić Nikolaj, eds. Real and Financial Sectors in Post-Pandemic Central and Eastern Europe: The Impact of Economic, Monetary, and Fiscal Policy, Cham: Springer International Publishing, 2022, pp. 109–120. https://doi.org/10.1007/978-3-030-99850-9_7.
  11. T.P. Hill, “A statistical derivation of the significant-digit law,” Statistical Science, vol. 10, no. 4, pp. 354–363, 1995, https://doi.org/10.1214/ss/1177009869.
  12. C. Durtschi, W. Hillison, and C. Pacini, “The Effective Use of Benford’s Law to Assist in Detecting Fraud in Accounting Data,” J. Forensic Account, vol. 5, Jan. 2004.
  13. S. Günnel and K.-H. Tödter, “Does Benford’s Law hold in economic research and forecasting?,” Empirica, vol. 36, no. 3, pp. 273–292, 2009, https://doi.org/10.1007/s10663-008-9084-1.
  14. J. Vičič and A. Tošić, “Application of Benford’s Law on Cryptocurrencies,” Journal of Theoretical and Applied Electronic Commerce Research, vol. 17, no. 1, pp. 313–326, 2022, https://doi.org/10.3390/jtaer17010016.
  15. E.M. Noleto-Filho, A.R. Carvalho, M.J.F. Thomé-Souza, et al., “Reporting the accuracy of small-scale fishing data by simply applying Benford’s law,” Frontiers in Marine Science, vol. 9, 2022, https://doi.org/10.3389/fmars.2022.947503.
  16. F. Hanci, “Application of Benford’s law in agricultural production statistics,” Journal of the National Science Foundation of Sri Lanka, vol. 50, no. 2, pp. 387–393, 2022.
  17. T. Suzuki, T. Kamimasu, T. Nakatoh, et al., “Identification of Unnatural Subsets in Statistical Data,” in 2018 7th International Congress on Advanced Applied Informatics (IIAI-AAI), 2018, pp. 74–80. https://doi.org/10.1109/IIAI-AAI.2018.00024.
  18. D. Petrović, M. Novović, and M. Šoškić, “Comparative analysis of milling-bakery and confectionery industry in Serbia based on Benford’s Law,” Economic of Agriculture, vol. 72, no. 1, pp. 13–32, Mar. 2025, https://doi.org/10.59267/ekoPolj250113P.
  19. M. Parker and C. Jeynes, A Maximum Entropy Resolution to the Wine/Water Paradox. 2023. https://doi.org/10.20944/preprints202306.1551.v1.
  20. S.J.E. Parreño, “Analyzing crop production statistics of the Philippines using the newcomb-benford law,” Multidisciplinary Science Journal, vol. 6, no. 6, 2024, https://doi.org/10.31893/multiscience.2024079.
  21. L. Qin, S. Han, L. Xing, et al., “Application Research of Benford’s Law in Testing Agrometeorological Data,” in 2019. https://doi.org/10.1088/1755-1315/310/5/052030.
  22. Á.R. Domínguez-Bustos, R. Cabrera-Castro, M.L. Ramos, et al., “Using Benford’s Law to Detect Possible Biases in Reported Catches of Tropical Tuna From the Indian Ocean,” Fisheries Management and Ecology, vol. 32, no. 1, pp. e12749, 2025, https://doi.org/10.1111/fme.12749.
  23. F. Martinez-Sanchez, “Tracking the Price of Almonds in Spain,” Journal of Competition Law and Economics, vol. 17, no. 3, pp. 750–763, 2021, https://doi.org/10.1093/joclec/nhab002.
  24. M. Ausloos, P.E. Sastroredjo, and P. Khrennikova, “Note on Pre-Taxation Data Reported by UK FTSE-Listed Companies: Search for Compatibility with Benford’s Laws,” Stats, vol. 8, no. 1, pp. 15, Mar. 2025, https://doi.org/10.3390/stats8010015.
  25. Š. Isaković-Kaplan, L. Demirović, and M. Proho, “Benford’s law in forensic analysis of income statements of economic entities in Bosnia and Herzegovina,” Croatian Economic Survey, vol. 23, no. 1, pp. 31–61, 2021, https://doi.org/10.15179/ces.23.1.2.
  26. X. Garza-Gomez, X. Dong, and Z. Yang, “Unusual patterns in reported segment earnings of US firms,” Journal of Applied Accounting Research, vol. 16, no. 2, pp. 287–304, 2015, https://doi.org/10.1108/JAAR-04-2013-0031.
  27. M.J. Nigrini, “An Assessment of the Change in the Incidence of Earnings Management Around the Enron-Andersen Episode,” Review of Accounting and Finance, vol. 4, no. 1, pp. 92–110, 2005, https://doi.org/10.1108/eb043420.
  28. P. Fernandes, Sé. Ciardhuáin, and M. Antunes, “Unveiling Malicious Network Flows Using Benford’s Law,” Mathematics, vol. 12, no. 15, 2024, https://doi.org/10.3390/math12152299.
  29. L.M. Adahali and M. Hall, “Application of the Benford’s law to Social bots and Information Operations activities,” in 2020, . https://doi.org/10.1109/CyberSA49311.2020.9139709.
  30. M. Puuček, M. Plaček, and F. Ochrana, “Do the data on municipal expenditures in the Czech Republic imply incorrectness in their management?,” Economics and Management, 2016.
  31. T. Van Caneghem, “NPO Financial Statement Quality: An Empirical Analysis Based on Benford’s Law,” Voluntas, vol. 27, no. 6, pp. 2685–2708, 2016, https://doi.org/10.1007/s11266-015-9629-4.
  32. F.A.I. González, “Self-reported income data: are people telling the truth?,” Journal of Financial Crime, vol. 27, no. 4, pp. 1349–1359, 2020, https://doi.org/10.1108/JFC-08-2019-0113.
  33. R.S. Cella and E. Zanolla, “Benford’s Law and transparency: An analysis of municipal expenditure,” Brazilian Business Review, vol. 15, no. 4, pp. 331–347, 2018, https://doi.org/10.15728/bbr.2018.15.4.2.
  34. D. Geyer and C. Drechsler, “Detecting cosmetic debt management using Benford’s law,” Journal of Applied Business Research, vol. 30, no. 5, pp. 1485–1492, 2014, https://doi.org/10.19030/jabr.v30i5.8801.
  35. V. Aggarwal and K. Dharni, “Deshelling the Shell Companies Using Benford’s Law: An Emerging Market Study,” Vikalpa, vol. 45, no. 3, pp. 160–169, 2020, https://doi.org/10.1177/0256090920979695.
  36. E. Badal-Valero, J.A. Alvarez-Jareño, and J.M. Pavía, “Combining Benford’s Law and machine learning to detect money laundering. An actual Spanish court case,” Forensic Science International, vol. 282, pp. 24–34, 2018, https://doi.org/10.1016/j.forsciint.2017.11.008.
  37. R.B. Sowby, “Conformance of Public Water Use Data to Benford’s Law,” Journal - American Water Works Association, vol. 110, no. 12, pp. E52–E59, 2018, https://doi.org/10.1002/awwa.1161.
  38. C.R.S. Carmo, F.C. Nunes, and F. de L. Caneppele, “The limits of conformity analysis under the Newcomb-Benford law and the COVID-19 pandemic in Brazil,” Brazilian Journal of Biometrics, vol. 41, no. 3, pp. 234–248, Sept. 2023, https://doi.org/10.28951/bjb.v41i3.626.
  39. D. Figueiredo and L. Silva, “Multiple conformity tests to assess deviations from the Newcomb-Benford Law (NBL): A replication of Koch and Okamura (2020),” Model Assisted Statistics and Applications, vol. 19, no. 1, pp. 117–122, 2024, https://doi.org/10.3233/MAS-231459.
  40. A.W. Meade, E.C. Johnson, and P.W. Braddy, “Power and Sensitivity of Alternative Fit Indices in Tests of Measurement Invariance,” Journal of Applied Psychology, vol. 93, no. 3, pp. 568–592, 2008, https://doi.org/10.1037/0021-9010.93.3.568.
  41. P. Luty, M. Petković, and R. Vavrek, “Applying Benfordʼs Law on assessing the reliability of financial information in European companies from the rental and leasing sector before and after the adoption of IFRS 16,” Zeszyty Teoretyczne Rachunkowosci, vol. 46, no. 4, pp. 51–68, 2022, https://doi.org/10.5604/01.3001.0016.1302.
  42. R. Cerqueti and M. Maggi, “Data validity and statistical conformity with Benford’s Law,” Chaos, Solitons & Fractals, vol. 144, pp. 110740, Mar. 2021, https://doi.org/10.1016/j.chaos.2021.110740.
  43. C. Goh, “Applying visual analytics to fraud detection using Benford’s law,” Journal of Corporate Accounting and Finance, vol. 31, no. 4, pp. 202–208, 2020, https://doi.org/10.1002/jcaf.22440.
  44. D. Figueiredo Filho, L. Silva, and H. Medeiros, ““Won’t get fooled again”: statistical fault detection in COVID-19 Latin American data,” Globalization and Health, vol. 18, no. 1, 2022, https://doi.org/10.1186/s12992-022-00899-1.
  45. H.R. Morales, M. Porporato, and N. Epelbaum, “Benford’s law for integrity tests of high-volume databases: a case study of internal audit in a state-owned enterprise,” Journal of Economics, Finance and Administrative Science, vol. 27, no. 53, pp. 154–174, 2022, https://doi.org/10.1108/JEFAS-07-2021-0113.
  46. M. Miranda-Zanetti, F. Delbianco, and F. Tohmé, “Tampering with inflation data: A Benford law-based analysis of national statistics in Argentina,” Physica A: Statistical Mechanics and its Applications, vol. 525, pp. 761–770, July 2019, https://doi.org/10.1016/j.physa.2019.04.042.
  47. C.J. Skousen, L. Guan, and T.S. Wetzel, “Anomalies and unusual patterns in reported earnings: Japanese managers round earnings,” Journal of International Financial Management and Accounting, vol. 15, no. 3, pp. 212–234, 2004, https://doi.org/10.1111/j.1467-646X.2004.00108.x.
  48. B. Demir and B. Javorcik, “Trade policy changes, tax evasion and Benford’s law,” Journal of Development Economics, vol. 144, pp. 102456, May 2020, https://doi.org/10.1016/j.jdeveco.2020.102456.
  49. P. Luty and Z. Zawolska, “Detecting Anomalies in Tax Revenues Using Benford’s Law. The Case of Polish Adjustment,” Central European Business Review, vol. 14, June 2025, https://doi.org/10.18267/j.cebr.401.
  50. D. Amiram, Z. Bozanic, and E. Rouen, “Financial statement errors: evidence from the distributional properties of financial statement numbers,” Review of Accounting Studies, vol. 20, no. 4, pp. 1540–1593, 2015, https://doi.org/10.1007/s11142-015-9333-z.