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Nighttime lights and wealth in very small areas:
[Nachtlichter und Wohlstand in Kleinräumigen Daten:]

Author

Listed:
  • Ilari Määttä

    (TU Braunschweig)

  • Thomas Ferreira

    (University of Cape Town)

  • Christian Leßmann

    (TU Dresden)

Abstract

Nighttime lights observed from satellites are a widely accepted proxy measure for economic development. This is mainly based on cross-country evidence that finds strong correlations between lights and Gross Domestic Product. Yet, the evidence on the correlations at local levels is scarce, and it often relies on randomly sampled survey data. We contribute by enhancing the understanding of the relationship between light and development at local levels. First, we use complete (non-publicly available) census data from Namibia to evaluate the findings based on the randomly sampled Demographic and Health Surveys data. We find that the census data provides a stronger association between light and wealth at local levels. Second, we criticize the practice of aggregating light from buffers around survey cluster locations. Instead, we recommend aggregating data in grid cells, and studying the relationship in different grid sizes. In our study correlations based on grid cells remain significant from a 0.5 degree grid to the smallest 0.0083 degree grid (~1 km2) allowed by the nighttime light data. Third, we supplement the commonly used relative wealth index by using individual asset variables as proxies for the total stock of wealth. The stock variables reveal a significant association between changes in light and wealth which cannot be found using our relative wealth index. Altogether, our results show that nighttime lights provide an even stronger signal of economic development at local levels than the current survey-based results in the literature suggest.

Suggested Citation

  • Ilari Määttä & Thomas Ferreira & Christian Leßmann, 2022. "Nighttime lights and wealth in very small areas: [Nachtlichter und Wohlstand in Kleinräumigen Daten:]," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 42(2), pages 161-190, August.
  • Handle: RePEc:spr:jahrfr:v:42:y:2022:i:2:d:10.1007_s10037-021-00159-6
    DOI: 10.1007/s10037-021-00159-6
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    References listed on IDEAS

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    Cited by:

    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.

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