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Measuring Inequality from Above

Author

Listed:
  • José García-Montalvo
  • Marta Reynal-Querol
  • Juan Carlos Muñoz Mora

Abstract

Recent research has shown the usefulness of nighttime light (NTL) data as a proxy for growth and economic activity. This paper explores the potential of using luminosity at night, recorded by satellite imagery, to construct measures of inequality. We develop a new methodology to construct a Gini index for each country using the nighttime light per capita over millions of small pixels. To assess the usefulness of our procedure, we check the correlation of our measure with the common factor extracted from the analysis of several Gini indices calculated using traditional data sources. Finally, we show two specific applications of our methodology: the calculation of within and between inequality across regions and ethnic groups.

Suggested Citation

  • José García-Montalvo & Marta Reynal-Querol & Juan Carlos Muñoz Mora, 2021. "Measuring Inequality from Above," Working Papers 1252, Barcelona School of Economics.
    • Handle: RePEc:bge:wpaper:1252
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    References listed on IDEAS

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    10. 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.
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    14. Addison,Douglas M. & Stewart,Benjamin P., 2015. "Nighttime lights revisited : the use of nighttime lights data as a proxy for economic variables," Policy Research Working Paper Series 7496, The World Bank.
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    Cited by:

    1. Bluhm, Richard & Krause, Melanie, 2022. "Top lights: Bright cities and their contribution to economic development," Journal of Development Economics, Elsevier, vol. 157(C).

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    More about this item

    Keywords

    Inequality; inequality between and within decomposition; nighttime light; development;
    All these keywords.

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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