Validating China's Output Data Using Satellite Observations

Abstract

Can officially reported output figures be externally validated? This paper presents a dynamic panel framework for assessing statistics using verifiable signals of economic activity. In this context, satellite readings of nitrogen dioxide, a byproduct of combustion, are forwarded. The problem of validating China’s reported gross domestic product at the subnational level during two recent downturns is considered. During the Great Recession period, reported figures are validated for some regions, but not others, including specifically those known to be inaccurate.

Keywords: China, GDP, Nitrogen Dioxide, Dynamic Panel Data

JEL Classification: C33, E01, Q50