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Are nightlight data a relevant proxy for economic activity in small island developing states ?

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  • Fontaine, Idriss
  • Hermet, François
  • Lucic, Nicolas

Abstract

By combining nightlight data with GDP data for Small Island Developing States (SIDS), we investigate the nature of their empirical relationship. We find a strong positive correlation between the two variables. Econometric estimates suggest that the elasticity of GDP with respect to nightlights is 0.20 over the entire sample period, with evidence pointing to a decline in the magnitude of this elasticity since 2013, when the collection of nightlights has been based on VIIRS sensors. Overall, our study is the first to demonstrate that nightlight data constitutes a relevant proxy for economic activity in SIDS, a group of territories characterized by a scarcity of economic data. It also suggests that users should consider the change in nightlight data collection, as it may affect the magnitude of the statistical association, particularly in small areas.

Suggested Citation

  • Fontaine, Idriss & Hermet, François & Lucic, Nicolas, 2025. "Are nightlight data a relevant proxy for economic activity in small island developing states ?," Economics Letters, Elsevier, vol. 253(C).
    • Handle: RePEc:eee:ecolet:v:253:y:2025:i:c:s0165176525002125
    DOI: 10.1016/j.econlet.2025.112375
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    More about this item

    Keywords

    Small island developing states; Nightlight data; GDP;
    All these keywords.

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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