Night-Time Light Data: A Good Proxy Measure for Economic Activity?

Charlotta Mellander, Kevin Stolarick (), Zara Matheson () and José Lobo ()
Additional contact information
Kevin Stolarick: University of Toronto
Zara Matheson: University of Toronto
José Lobo: Arizona State University

No 315, Working Paper Series in Economics and Institutions of Innovation from Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

Abstract: Research has suggested that night-time light (NTL) can be used as a proxy for a number of variables, including urbanization, density, and economic growth. But, just how close is the relationship between NTL and economic activity? This paper uses a combination of correlation analysis and geographically weighted regressions in order to examine the relationship between the two. We use fine-grained geo-coded micro-data for Swedish establishments and individuals, and match it with both radiance and saturated light emissions. We find that the correlation between NTL and economic activity is strong enough to make it a relatively good proxy for population and establishment density, but the correlation is weaker in relation to wages. In general, we find a stronger relation between light and density values, than with light and total values. We also find a closer connection between radiance light and economic activity, than with saturated light. Further, we find the link between light and economic activity, especially estimated by wages, to be slightly overestimated in large urban areas, and underestimated in rural areas.

Keywords: Light-Emission; Economic Activity; Proxy (search for similar items in EconPapers)
JEL-codes: O18 R10 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2013-06-10
New Economics Papers: this item is included in nep-ene and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Related works:
Journal Article: Night-Time Light Data: A Good Proxy Measure for Economic Activity? (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:cesisp:0315

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