Can Black Gold Shine? The Effect of Oil Prices on Nighttime Light in Brazil

59 Pages Posted: 16 Dec 2016

See all articles by Mark Gradstein

Mark Gradstein

Ben-Gurion University of the Negev - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR); World Bank - Development Research Group (DECRG)

Marc Klemp

University of Copenhagen - Department of Economics

Date Written: December 2016

Abstract

We explore the existence of a local "resource curse" related to Brazi's oil reserves. To this end, we examine the effect of changes in international oil prices interacted with measures of oil access on nighttime light - a measure of economic activity - across the country's localities. We detect no evidence of a resource curse: in fact, better access to oil enhances the positive effect of oil prices on economic activity. Our estimates indicate that a doubling of oil prices causes an average increase in luminosity of some 50 percent more in oil rich than in oil poor states; and 30 percent more, on average, in localities within 100 km dis-tance to the nearest oil field relative to more remote localities.

Suggested Citation

Gradstein, Mark and Klemp, Marc, Can Black Gold Shine? The Effect of Oil Prices on Nighttime Light in Brazil (December 2016). CEPR Discussion Paper No. DP11686, Available at SSRN: https://ssrn.com/abstract=2886488

Mark Gradstein (Contact Author)

Ben-Gurion University of the Negev - Department of Economics ( email )

Beer-Sheva 84105
Israel
+97 2 8647 2288 (Phone)
+97 2 8647 2941 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.cesifo.de

Centre for Economic Policy Research (CEPR)

London
United Kingdom

World Bank - Development Research Group (DECRG)

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MSN3-311
Washington, DC 20433
United States

Marc Klemp

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark

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