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Proxying Economic Activity with Daytime Satellite Imagery: Filling Data Gaps across Time and Space

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  • Lehnert, Patrick

    (University of Zurich)

  • Niederberger, Michael

    (University of Zurich)

  • Backes-Gellner, Uschi

    (University of Zurich)

  • Bettinger, Eric

    (Stanford University)

Abstract

This paper develops a novel procedure for proxying economic activity with day-time satellite imagery across time periods and spatial units, for which reliable data on economic activity are otherwise not available. In developing this unique proxy, we apply machine-learning techniques to a historical time series of daytime satellite imagery dating back to 1984. Compared to satellite data on night light intensity, another common economic proxy, our proxy more precisely predicts economic activity at smaller regional levels and over longer time horizons. We demonstrate our measure's usefulness for the example of Germany, where East German data on economic activity are unavailable for detailed regional levels and historical time series. Our procedure is generalizable to any region in the world, and it has great potential for analyzing historical economic developments, evaluating local policy reforms, and controlling for economic activity at highly disaggregated regional levels in econometric applications.

Suggested Citation

  • Lehnert, Patrick & Niederberger, Michael & Backes-Gellner, Uschi & Bettinger, Eric, 2022. "Proxying Economic Activity with Daytime Satellite Imagery: Filling Data Gaps across Time and Space," IZA Discussion Papers 15555, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15555
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    Cited by:

    1. Tobias Schlegel & Uschi Backes-Gellner, 2023. "The role of fields of study for the effects of higher education institutions on regional firm location," Small Business Economics, Springer, vol. 61(4), pages 1587-1656, December.

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    More about this item

    Keywords

    daytime satellite imagery; Landsat; machine learning; economic activity; land cover;
    All these keywords.

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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