Bright Lights, Big Cities: Measuring National and Subnational Economic Growth in Africa from Outer Space, with an Application to Kenya and Rwanda

27 Pages Posted: 20 Apr 2016

See all articles by Tom Bundervoet

Tom Bundervoet

Vrije Universiteit Brussel (VUB) - MOSI

Laban Maiyo

World Bank - Africa

Apurva Sanghi

World Bank

Date Written: October 28, 2015

Abstract

This paper uses the night lights (satellite imagery from outer space) approach to estimate growth in and levels of subnational 2013 gross domestic product for 47 counties in Kenya and 30 districts in Rwanda. Estimating subnational gross domestic product is consequential for three reasons. First, there is strong policy interest in how growth can occur in different parts of countries, so that communities can share in national prosperity and not get left behind. Second, subnational entities want to understand how they stack up against their neighbors and competitors, and how much they contribute to national gross domestic product. Third, such information could help private investors to assess where to undertake investments. Using night lights has the advantage of seeing a new and more accurate estimation of informal activity, and being independent of official data. However, the approach may underestimate economic activity in sectors that are largely unlit notably agriculture. For Kenya, the results of the analysis affirm that Nairobi County is the largest contributor to national gross domestic product. However, at 13 percent, this contribution is lower than commonly thought. For Rwanda, the three districts of Kigali account for 40 percent of national gross domestic product, underscoring the lower scale of economic activity in the rest of the country. To get a composite picture of subnational economic activity, especially in the context of rapidly improving official statistics in Kenya and Rwanda, it is important to estimate subnational gross domestic product using standard approaches (production, expenditure, income).

Keywords: Consumption, National Urban Development Policies & Strategies, Regional Urban Development, Urban Economics, Industrial Economics, Fiscal & Monetary Policy, City to City Alliances, Urban Communities, Economic Theory & Research, Urban Economic Development, Economic Growth

Suggested Citation

Bundervoet, Tom and Maiyo, Laban and Sanghi, Apurva, Bright Lights, Big Cities: Measuring National and Subnational Economic Growth in Africa from Outer Space, with an Application to Kenya and Rwanda (October 28, 2015). World Bank Policy Research Working Paper No. 7461, Available at SSRN: https://ssrn.com/abstract=2682850

Tom Bundervoet (Contact Author)

Vrije Universiteit Brussel (VUB) - MOSI

Brussels
Belgium

Laban Maiyo

World Bank - Africa

1818 H Street
Washington, DC 20433
United States

Apurva Sanghi

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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