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Measuring Economic Growth from Outer Space

  • J. Vernon Henderson
  • Adam Storeygard
  • David N. Weil

We develop a statistical framework to use satellite data on night lights to augment official income growth measures. For countries with poor national income accounts, the optimal estimate of growth is a composite with roughly equal weights on conventionally measured growth and growth predicted from lights. Our estimates differ from official data by up to three percentage points annually. Using lights, empirical analyses of growth need no longer use countries as the unit of analysis; we can measure growth for sub- and supranational regions. We show, for example, that coastal areas in sub-Saharan Africa are growing slower than the hinterland. (JEL E01, E23, O11, 047, 057)

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Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 102 (2012)
Issue (Month): 2 (April)
Pages: 994-1028

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Handle: RePEc:aea:aecrev:v:102:y:2012:i:2:p:994-1028
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  1. Mikael Lindahl & Alan B. Krueger, 2001. "Education for Growth: Why and for Whom?," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1101-1136, December.
  2. Tomas Kögel & Alexia Prskawetz, 2000. "Agricultural productivity growth and escape from the Malthusian trap," MPIDR Working Papers WP-2000-002, Max Planck Institute for Demographic Research, Rostock, Germany.
  3. J. Vernon Henderson & Adam Storeygard & David N. Weil, 2009. "Measuring Economic Growth from Outer Space," NBER Working Papers 15199, National Bureau of Economic Research, Inc.
  4. Ades, Alberto F & Glaeser, Edward L, 1995. "Trade and Circuses: Explaining Urban Giants," The Quarterly Journal of Economics, MIT Press, vol. 110(1), pages 195-227, February.
  5. Martin Browning & Thomas Crossley, 2009. "Are two cheap, noisy measures better than one expensive, accurate one?," IFS Working Papers W09/01, Institute for Fiscal Studies.
  6. Edward L. Glaeser & Albert Saiz, 2003. "The rise of the skilled city," Working Papers 04-2, Federal Reserve Bank of Philadelphia.
  7. Angus Deaton & Alan Heston, 2008. "Understanding PPPs and PPP-based national accounts," Working Papers 1120, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
  8. Richard Tiffin & Xavier Irz, 2006. "Is agriculture the engine of growth?," Agricultural Economics, International Association of Agricultural Economists, vol. 35(1), pages 79-89, 07.
  9. Good, David F., 1994. "The Economic Lag of Central and Eastern Europe: Income Estimates for the Habsburg Successor States, 1870–1910," The Journal of Economic History, Cambridge University Press, vol. 54(04), pages 869-891, December.
  10. Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
  11. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
  12. Daniel da Mata & Uwe Deichmann & J. Vernon Henderson & Somik V. Lall & Hyoung G. Wang, 2005. "Determinants of City Growth in Brazil," Discussion Papers 1112, Instituto de Pesquisa Econômica Aplicada - IPEA.
  13. Simon Johnson & William Larson & Chris Papageorgiou & Arvind Subramanian, 2009. "Is Newer Better? Penn World Table Revisions and Their Impact on Growth Estimates," NBER Working Papers 15455, National Bureau of Economic Research, Inc.
  14. Duncan Black & Vernon Henderson, 1999. "A Theory of Urban Growth," Journal of Political Economy, University of Chicago Press, vol. 107(2), pages 252-284, April.
  15. Chun-Chung Au & J. Vernon Henderson, 2006. "Are Chinese Cities Too Small?," Review of Economic Studies, Oxford University Press, vol. 73(3), pages 549-576.
  16. Yong Suk Lee & Andrew D. Foster, 2013. "Staffing Subsidies and the Quality of Care in Nursing Homes," Department of Economics Working Papers 2013-16, Department of Economics, Williams College.
  17. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-42, March.
  18. John W. Dawson & Joseph P. Dejuan & John J. Seater & E. Frank Stephenson, 2001. "Economic information versus quality variation in cross-country data," Canadian Journal of Economics, Canadian Economics Association, vol. 34(4), pages 988-1009, November.
  19. William Larson & Chris Papageorgiou & Arvind Subramania & Simon Johnson, 2009. "Is Newer Better? Penn World Table Revisions and the Growth Literature," 2009 Meeting Papers 858, Society for Economic Dynamics.
  20. Sharon Maccini & Dean Yang, 2009. "Under the Weather: Health, Schooling, and Economic Consequences of Early-Life Rainfall," American Economic Review, American Economic Association, vol. 99(3), pages 1006-26, June.
  21. World Bank, 2005. "Managing Agricultural Production Risk : Innovations in Developing Countries," World Bank Other Operational Studies 8797, The World Bank.
  22. Nuxoll, Daniel A, 1994. "Differences in Relative Prices and International Differences in Growth Rates," American Economic Review, American Economic Association, vol. 84(5), pages 1423-36, December.
  23. Brueckner, Jan K, 1990. "Analyzing Third World Urbanization: A Model with Empirical Evidence," Economic Development and Cultural Change, University of Chicago Press, vol. 38(3), pages 587-610, April.
  24. Henderson, Vernon, 2003. " The Urbanization Process and Economic Growth: The So-What Question," Journal of Economic Growth, Springer, vol. 8(1), pages 47-71, March.
  25. Doll, Christopher N.H. & Muller, Jan-Peter & Morley, Jeremy G., 2006. "Mapping regional economic activity from night-time light satellite imagery," Ecological Economics, Elsevier, vol. 57(1), pages 75-92, April.
  26. International Monetary Fund, 2006. "Jamaica: Selected Issues," IMF Staff Country Reports 06/157, International Monetary Fund.
  27. Xavier Irz & Terry Roe, 2005. "Seeds of growth? Agricultural productivity and the transitional dynamics of the Ramsey model," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 32(2), pages 143-165, June.
  28. Edward Miguel & Shanker Satyanath & Ernest Sergenti, 2004. "Economic Shocks and Civil Conflict: An Instrumental Variables Approach," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 725-753, August.
  29. J. Vernon Henderson & Hyoung Gun Wang, 2005. "Aspects of the rural-urban transformation of countries," Journal of Economic Geography, Oxford University Press, vol. 5(1), pages 23-42, January.
  30. Davis, James C. & Henderson, J. Vernon, 2003. "Evidence on the political economy of the urbanization process," Journal of Urban Economics, Elsevier, vol. 53(1), pages 98-125, January.
  31. Hansen, Christian B., 2007. "Generalized least squares inference in panel and multilevel models with serial correlation and fixed effects," Journal of Econometrics, Elsevier, vol. 140(2), pages 670-694, October.
  32. Sutton, Paul C. & Costanza, Robert, 2002. "Global estimates of market and non-market values derived from nighttime satellite imagery, land cover, and ecosystem service valuation," Ecological Economics, Elsevier, vol. 41(3), pages 509-527, June.
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