Revisiting Night Lights as Proxy for Economic Growth: A Multi-Year Light Based Growth Indicator (LBGI) for China, India and the U.S.

Abstract

In this paper we explore how satellite images of global night lights from the years 2001 to 2007 can be used to estimate economic activity at the sub-regional level in the U.S., India and China. The night lights based estimates of economic activity are then spatially analyzed and compared with sub-regional economic indicators where available for selected years. For this purpose we have extended the standard bi-variate LISA (Local Indicators of Spatial Autocorrelation) to include bi-directional analysis. This bi-directional bi-variate analysis helps to identify those jurisdictions where night lights intensity can be used as a proxy for measuring sub-regional economic growth. We also briefly discuss two theoretical models that shed light on the geospatial patterns reflected by the night light data. The results are presented with a series of maps, charts and tables.

Keywords: Economic Growth, Satellite Data, Night Lights, LBGI (Light Based Growth Indicator), India GDP, China GDP, USA

JEL Classification: R11, R12, C2, O18, O57