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Smog, not lights. Tracking Bolivia’s 2024–2026 recession from space

Author

Listed:
  • Werner Hernani Limarino

    (Investigador asociado de INESAD)

  • Ahmed Eid

    (Investigador invitado de INESAD)

Abstract

Nighttime lights are the standard satellite proxy for economic activity, but they fail to detect recessions. On a 2020–2024 panel of nine Bolivian departments, VIIRS lights match the sign of PIB growth 78 percent of the time during expansions but only 39 percent during contractions -worse than coin-flip. The reason is structural: lit infrastructure is a stock that does not contract when activity falls, while fossil-fuel combustion is a flow that does. Tropospheric NO2, a neardirect measure of combustion retrieved daily by ESA’s Sentinel-5P satellite, maintains 72 percent sign concordance during contractions. We exploit this asymmetry to build a monthly recession indicator from TROPOMI NO2 over eleven Bolivian metropolitan areas, July 2018 through April 2026. The indicator peaked in June 2023; INE quarterly PIB first registered negative year-on-year growth five quarters later, in 2024Q4. Through November 2025 the satellite and INE agree to within one log point. A pre-break SARIMA trained through November 2025 projects a 2026 PIB contraction of approximately 2 percent, consistent with the IMF (-3.3 percent), World Bank (-3.2), and IIF (-4) forecasts, though the confidence interval is wide. The centered-12-month March 2026 endpoint becomes fully observable from actual data in October 2026, and we commit to a revisit at that date. The indicator is reproducible from free Copernicus data with a two-month publication lag.

Suggested Citation

  • Werner Hernani Limarino & Ahmed Eid, 2026. "Smog, not lights. Tracking Bolivia’s 2024–2026 recession from space," Development Research Working Paper Series 06/2026, Institute for Advanced Development Studies.
    • Handle: RePEc:adv:wpaper:202606
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law

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