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Economic Rise and Decline in Indonesia – As Seen from Space

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  • Olivia, Susan
  • Gibson, John

Abstract

Satellite-detected luminosity is sometimes used to proxy for economic activity although only recently within the mainstream economics literature (Henderson et al., 2012). If this method works it holds great promise for developing countries with weak statistical systems that face difficulties in consistently measuring long-term economic change. Regardless of how chaotic are statistical efforts on the ground, viewed from space it may be possible to detect economic change, with high frequency and for small areas. But doubts remain about how much trust can be put in night lights data as a proxy for economic growth since previous validation attempts just compare with other error-ridden measures (Henderson et al., 2012; Chen and Nordhaus, 2011; Kulkarni et al., 2011). This paper uses gold standard data on electrification and economic growth for 5000 sub-districts in Indonesia from 1992 to 2008 to evaluate the reliability of night-light based measures of local economic change. Our results also contribute to debate in the literature about the severity of the shock to Indonesia from the Asian Financial Crisis of 1997 and the subsequent rate of rebound in economic activity.

Suggested Citation

  • Olivia, Susan & Gibson, John, 2013. "Economic Rise and Decline in Indonesia – As Seen from Space," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 151210, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea13:151210
    DOI: 10.22004/ag.econ.151210
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    References listed on IDEAS

    as
    1. Gibson, John & Olivia, Susan, 2010. "The Effect of Infrastructure Access and Quality on Non-Farm Enterprises in Rural Indonesia," World Development, Elsevier, vol. 38(5), pages 717-726, May.
    2. Stefan Dercon & Daniel O. Gilligan & John Hoddinott & Tassew Woldehanna, 2009. "The Impact of Agricultural Extension and Roads on Poverty and Consumption Growth in Fifteen Ethiopian Villages," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 1007-1021.
    3. Gibson, John & Stillman, Steven & Le, Trinh, 2008. "CPI bias and real living standards in Russia during the transition," Journal of Development Economics, Elsevier, vol. 87(1), pages 140-160, August.
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    5. Hal HILL & Takashi SHIRAISHI, 2007. "Indonesia After the Asian Crisis," Asian Economic Policy Review, Japan Center for Economic Research, vol. 2(1), pages 123-141, June.
    6. Dercon, Stefan, 2004. "Growth and shocks: evidence from rural Ethiopia," Journal of Development Economics, Elsevier, vol. 74(2), pages 309-329, August.
    7. Angus Deaton & Alan Heston, 2010. "Understanding PPPs and PPP-Based National Accounts," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(4), pages 1-35, October.
    8. Martin Ravallion & Shaohua Chen, 1999. "When Economic Reform is Faster Then Statistical Reform: Measuring and Explaining Income Inequality in Rural China," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(1), pages 33-56, February.
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    10. J. Vernon Henderson & Adam Storeygard & David N. Weil, 2012. "Measuring Economic Growth from Outer Space," American Economic Review, American Economic Association, vol. 102(2), pages 994-1028, April.
    11. Christopher D. Elvidge & Daniel Ziskin & Kimberly E. Baugh & Benjamin T. Tuttle & Tilottama Ghosh & Dee W. Pack & Edward H. Erwin & Mikhail Zhizhin, 2009. "A Fifteen Year Record of Global Natural Gas Flaring Derived from Satellite Data," Energies, MDPI, vol. 2(3), pages 1-28, August.
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    Cited by:

    1. Alexander D. Rothenberg & Samuel Bazzi & Shanthi Nataraj & Amalavoyal V. Chari, 2017. "When Regional Policies Fail An Evaluation of Indonesia's Integrated Economic Development Zones," Working Papers WR-1183, RAND Corporation.

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    Keywords

    Agricultural and Food Policy; Financial Economics; International Relations/Trade; Production Economics; Research Methods/ Statistical Methods;
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