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Using Nighttime Luminosity as a Proxy for Economic Growth in Africa: Is It a Bright Idea?

Author

Listed:
  • Nicolene Hamman

    (Nelson Mandela University, South Africa)

  • Andrew Phiri

    (Nelson Mandela University, South Africa)

Abstract

In this paper, we question whether night light luminosity data can be used as an alternative measure of GDP in 49 African countries. For this to be proven true, evidence of significant relationships between night light data and GDP time series variables needs to be confirmed through empirical analysis. In differing from previous studies, we employ pooled mean group (PMG) cross sectional cointegration estimators and wavelet coherence tools to examine the cointegration relationships and time-frequency synchronizations between GDP and DMSP-OLS night light intensity for annual data collected between 1992 and 2012. All in all, we find little evidence of significant relationships between nighttime data and GDP for individual African countries and therefore caution policymakers in strictly using DMSP-OLS data to create synthetic measures of economic growth. Possible avenues for future research are further recommended at the end of the study.

Suggested Citation

  • Nicolene Hamman & Andrew Phiri, 2022. "Using Nighttime Luminosity as a Proxy for Economic Growth in Africa: Is It a Bright Idea?," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 20(2 (Summer), pages 139-165.
    • Handle: RePEc:mgt:youmgt:v:20:y:2022:i:2:p:139-165
    DOI: 10.26493/1854-6935.20.139-165
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    DMSP-OLS night light; economic growth; complex wavelet analysis; Morlet wavelets; Africa;
    All these keywords.

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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