Are nightlight data a relevant proxy for economic activity in small island developing states ?

Idriss Fontaine, François Hermet and Nicolas Lucic

Economics Letters, 2025, vol. 253, issue C

Abstract: By combining nightlight data with GDP data for Small Island Developing States (SIDS), we investigate the nature of their empirical relationship. We find a strong positive correlation between the two variables. Econometric estimates suggest that the elasticity of GDP with respect to nightlights is 0.20 over the entire sample period, with evidence pointing to a decline in the magnitude of this elasticity since 2013, when the collection of nightlights has been based on VIIRS sensors. Overall, our study is the first to demonstrate that nightlight data constitutes a relevant proxy for economic activity in SIDS, a group of territories characterized by a scarcity of economic data. It also suggests that users should consider the change in nightlight data collection, as it may affect the magnitude of the statistical association, particularly in small areas.

Keywords: Small island developing states; Nightlight data; GDP (search for similar items in EconPapers)
JEL-codes: E01 O11 O47 R11 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:253:y:2025:i:c:s0165176525002125

DOI: 10.1016/j.econlet.2025.112375

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