Measuring Quarterly Economic Growth from Outer Space

43 Pages Posted: 19 Sep 2022

See all articles by Robert Beyer

Robert Beyer

International Monetary Fund (IMF)

Yingyao Hu

Johns Hopkins University - Department of Economics

Jiaxiong Yao

International Monetary Fund (IMF)

Abstract

This paper presents a novel framework to estimate the elasticity between nighttime lights and quarterly economic activity, and provides the first set of estimates for the recent VIIRS nighttime light data. The relationship is identified by accounting for varying degrees of measurement errors in nighttime light data across countries. We estimate that the elasticity is 1.55 for emerging markets and developing economies, with only small deviations across country groups and different model specifications. Using a light-adjusted measure of quarterly economic activity, we show that higher levels of development, statistical capacity, and voice and accountability are associated with more precise national accounts data. The elasticity allows quantification of subnational economic impacts. During the COVID-19 pandemic, regions with higher levels of development and population density experienced larger declines in economic activity.

Keywords: Nighttime lights, economic measurement, quarterly GDP, national accounts, COVID-19

Suggested Citation

Beyer, Robert and Hu, Yingyao and Yao, Jiaxiong, Measuring Quarterly Economic Growth from Outer Space. Available at SSRN: https://ssrn.com/abstract=4222768 or http://dx.doi.org/10.2139/ssrn.4222768

Robert Beyer

International Monetary Fund (IMF) ( email )

Yingyao Hu

Johns Hopkins University - Department of Economics ( email )

3400 Charles Street
Baltimore, MD 21218-2685
United States

Jiaxiong Yao (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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