Editing Benford's law (section)

=== Price digit analysis ===
Researchers have used Benford's law to detect [[psychological pricing]] patterns, in a Europe-wide study in consumer product prices before and after euro was introduced in 2002.<ref>{{Cite journal|last1=Sehity|first1=Tarek el|last2=Hoelzl|first2=Erik|last3=Kirchler|first3=Erich|date=2005-12-01|title=Price developments after a nominal shock: Benford's Law and psychological pricing after the euro introduction|journal=International Journal of Research in Marketing|volume=22|issue=4|pages=471–480|doi=10.1016/j.ijresmar.2005.09.002|s2cid=154273305 }}</ref> The idea was that, without psychological pricing, the first two or three digits of price of items should follow Benford's law. Consequently, if the distribution of digits deviates from Benford's law (such as having a lot of 9's), it means merchants may have used psychological pricing.

When [[Introduction of the euro|the euro replaced local currencies in 2002]], for a brief period of time, the price of goods in euro was simply converted from the price of goods in local currencies before the replacement. As it is essentially impossible to use psychological pricing simultaneously on both price-in-euro and price-in-local-currency, during the transition period, psychological pricing would be disrupted even if it used to be present. It can only be re-established once consumers have gotten used to prices in a single currency again, this time in euro.

As the researchers expected, the distribution of first price digit followed Benford's law, but the distribution of the second and third digits deviated significantly from Benford's law before the introduction, then deviated less during the introduction, then deviated more again after the introduction.