IDEAS home Printed from https://ideas.repec.org/a/spr/empeco/v65y2023i3d10.1007_s00181-023-02377-y.html
   My bibliography  Save this article

Lights and GDP relationship: What does the computer tell us?

Author

Listed:
  • Diep Hoang Phan

    (Monash University)

Abstract

The relationship between nighttime lights and GDP varies from country to country. However, which factors drive variations in the lights–GDP relationship across countries remains unclear. This paper examines the significance of approximately 600 potential drivers of uncertainty in the relationship between night lights and GDP worldwide. I employ three novel modern statistical techniques to select variables within a high-dimensional context: LASSO, minimax concave penalty, and spike-and-slab regression. Institutional quality emerges as the most important factor in explaining the difference between luminosity data and GDP across countries.

Suggested Citation

  • Diep Hoang Phan, 2023. "Lights and GDP relationship: What does the computer tell us?," Empirical Economics, Springer, vol. 65(3), pages 1215-1252, September.
    • Handle: RePEc:spr:empeco:v:65:y:2023:i:3:d:10.1007_s00181-023-02377-y
    DOI: 10.1007/s00181-023-02377-y
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00181-023-02377-y
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s00181-023-02377-y?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gibson, John & Olivia, Susan & Boe-Gibson, Geua & Li, Chao, 2021. "Which night lights data should we use in economics, and where?," Journal of Development Economics, Elsevier, vol. 149(C).
    2. Nathan Nunn & Diego Puga, 2012. "Ruggedness: The Blessing of Bad Geography in Africa," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 20-36, February.
    3. J. Vernon Henderson & Adam Storeygard & David N. Weil, 2012. "Measuring Economic Growth from Outer Space," American Economic Review, American Economic Association, vol. 102(2), pages 994-1028, April.
    4. Hal R. Varian, 2014. "Big Data: New Tricks for Econometrics," Journal of Economic Perspectives, American Economic Association, vol. 28(2), pages 3-28, Spring.
    5. Feige, Edgar L. & Urban, Ivica, 2008. "Measuring underground (unobserved, non-observed, unrecorded) economies in transition countries: Can we trust GDP?," Journal of Comparative Economics, Elsevier, vol. 36(2), pages 287-306, June.
    6. Sam Asher & Tobias Lunt & Ryu Matsuura & Paul Novosad, 2021. "Development Research at High Geographic Resolution: An Analysis of Night-Lights, Firms, and Poverty in India Using the SHRUG Open Data Platform," The World Bank Economic Review, World Bank, vol. 35(4), pages 845-871.
    7. Nyrup, Jacob & Bramwell, Stuart, 2020. "Who Governs? A New Global Dataset on Members of Cabinets," American Political Science Review, Cambridge University Press, vol. 114(4), pages 1366-1374, November.
    8. Maxim Pinkovskiy & Xavier Sala-i-Martin, 2016. "Lights, Camera … Income! Illuminating the National Accounts-Household Surveys Debate," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(2), pages 579-631.
    9. Keola, Souknilanh & Andersson, Magnus & Hall, Ola, 2015. "Monitoring Economic Development from Space: Using Nighttime Light and Land Cover Data to Measure Economic Growth," World Development, Elsevier, vol. 66(C), pages 322-334.
    10. Luis R. Martínez, 2022. "How Much Should We Trust the Dictator’s GDP Growth Estimates?," Journal of Political Economy, University of Chicago Press, vol. 130(10), pages 2731-2769.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tanner Regan & Giorgio Chiovelli & Stelios Michalopoulos & Elias Papaioannou, 2023. "Illuminating Africa?," Working Papers 2023-11, The George Washington University, Institute for International Economic Policy.
    2. Dickinson, Jeffrey, 2020. "Planes, trains, and automobiles: what drives human-made light?," MPRA Paper 117126, University Library of Munich, Germany.
    3. repec:ags:aaea22:335528 is not listed on IDEAS
    4. Felbermayr, Gabriel & Gröschl, Jasmin & Sanders, Mark & Schippers, Vincent & Steinwachs, Thomas, 2022. "The economic impact of weather anomalies," World Development, Elsevier, vol. 151(C).
    5. Beyer, Robert C.M. & Franco-Bedoya, Sebastian & Galdo, Virgilio, 2021. "Examining the economic impact of COVID-19 in India through daily electricity consumption and nighttime light intensity," World Development, Elsevier, vol. 140(C).
    6. Felbermayr, Gabriel & Gröschl, Jasmin & Sanders, Mark & Schippers, Vincent & Steinwachs, Thomas, 2018. "Shedding Light on the Spatial Diffusion of Disasters," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181556, Verein für Socialpolitik / German Economic Association.
    7. GIBSON, John & ZHANG, Xiaoxuan & PARK, Albert & YI, Jiang & XI, Li, 2024. "Remotely measuring rural economic activity and poverty : Do we just need better sensors?," CEI Working Paper Series 2023-08, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    8. Donn L Feir & Rob Gillezeau & Maggie E C Jones, 2024. "The Slaughter of the Bison and Reversal of Fortunes on the Great Plains," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 91(3), pages 1634-1670.
    9. Linsenmeier, Manuel, 2021. "Temperature variability and long-run economic development," LSE Research Online Documents on Economics 110499, London School of Economics and Political Science, LSE Library.
    10. Matthieu Charpe, 2023. "Convergence heterogeneity at the local level in sub‐Saharan Africa," Papers in Regional Science, Wiley Blackwell, vol. 102(2), pages 273-305, April.
    11. Achten, Sandra & Lessmann, Christian, 2020. "Spatial inequality, geography and economic activity," World Development, Elsevier, vol. 136(C).
    12. Makkar, Karan, 2023. "Defector Politicians and Economic Growth: Evidence from India," European Journal of Political Economy, Elsevier, vol. 79(C).
    13. John Gibson & Susan Olivia & Geua Boe‐Gibson, 2020. "Night Lights In Economics: Sources And Uses," Journal of Economic Surveys, Wiley Blackwell, vol. 34(5), pages 955-980, December.
    14. Kammerlander, Andreas & Schulze, Günther G., 2023. "Local economic growth and infant mortality," Journal of Health Economics, Elsevier, vol. 87(C).
    15. Shapiro, Daniel & Oh, Chang Hoon & Zhang, Peng, 2023. "Nighttime lights data and their implications for IB research," Journal of International Management, Elsevier, vol. 29(5).
    16. Jesson A. Pagaduan, 2022. "Do higher‐quality nighttime lights and net primary productivity predict subnational GDP in developing countries? Evidence from the Philippines," Asian Economic Journal, East Asian Economic Association, vol. 36(3), pages 288-317, September.
    17. Donn Feir & Rob Gillezeau & Maggie Jones, 2017. "The Slaughter of the North American Bison and Reversal of Fortunes on the Great Plains," Department Discussion Papers 1701, Department of Economics, University of Victoria.
    18. Moustapha, Mahamat, 2024. "Oil boom, rent sharing, job prospects and human capital investment: Evidence from Chad," Energy Economics, Elsevier, vol. 133(C).
    19. Bonggeun Kim & John Gibson & Geua Boe‐Gibson, 2024. "Measurement errors in popular night lights data may bias estimated impacts of economic sanctions: Evidence from closing the Kaesong Industrial Zone," Economic Inquiry, Western Economic Association International, vol. 62(1), pages 375-389, January.
    20. Donn L Feir & Rob Gillezeau & Maggie E C Jones, 2024. "The Slaughter of the Bison and Reversal of Fortunes on the Great Plains," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 91(3), pages 1634-1670.
    21. Kim, Jihee & Kim, Kyoochul & Park, Sangyoon & Sun, Chang, 2023. "The economic costs of trade sanctions: Evidence from North Korea," Journal of International Economics, Elsevier, vol. 145(C).

    More about this item

    Keywords

    Nighttime lights; Modern statistical tools; Official GDP; Measurement errors;
    All these keywords.

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:empeco:v:65:y:2023:i:3:d:10.1007_s00181-023-02377-y. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.