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Night-Time Light Data: A Good Proxy Measure for Economic Activity?

Author

Listed:
  • Mellander, Charlotta

    (Jönköping International Business School)

  • Stolarick, Kevin

    (University of Toronto)

  • Matheson, Zara

    (University of Toronto)

  • Lobo, José

    (Arizona State University)

Abstract

Research has suggested that night-time light (NTL) can be used as a proxy for a number of variables, including urbanization, density, and economic growth. But, just how close is the relationship between NTL and economic activity? This paper uses a combination of correlation analysis and geographically weighted regressions in order to examine the relationship between the two. We use fine-grained geo-coded micro-data for Swedish establishments and individuals, and match it with both radiance and saturated light emissions. We find that the correlation between NTL and economic activity is strong enough to make it a relatively good proxy for population and establishment density, but the correlation is weaker in relation to wages. In general, we find a stronger relation between light and density values, than with light and total values. We also find a closer connection between radiance light and economic activity, than with saturated light. Further, we find the link between light and economic activity, especially estimated by wages, to be slightly overestimated in large urban areas, and underestimated in rural areas.

Suggested Citation

  • Mellander, Charlotta & Stolarick, Kevin & Matheson, Zara & Lobo, José, 2013. "Night-Time Light Data: A Good Proxy Measure for Economic Activity?," Working Paper Series in Economics and Institutions of Innovation 315, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    • Handle: RePEc:hhs:cesisp:0315
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    References listed on IDEAS

    as
    1. Yee Leung & Chang-Lin Mei & Wen-Xiu Zhang, 2000. "Testing for Spatial Autocorrelation among the Residuals of the Geographically Weighted Regression," Environment and Planning A, , vol. 32(5), pages 871-890, May.
    2. Vernon Henderson & Adam Storeygard & David N. Weil, 2011. "A Bright Idea for Measuring Economic Growth," American Economic Review, American Economic Association, vol. 101(3), pages 194-199, May.
    3. Florida, Richard & Mellander, Charlotta & Gulden, Tim, 2010. "Global Metropolis - assessing economic activity in global centers based on nighttime satellite images," Working Paper Series in Economics and Institutions of Innovation 218, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    4. Richard Florida & Tim Gulden & Charlotta Mellander, 2008. "The rise of the mega-region," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 1(3), pages 459-476.
    5. Karen C Seto & Michail Fragkias & Burak Güneralp & Michael K Reilly, 2011. "A Meta-Analysis of Global Urban Land Expansion," PLOS ONE, Public Library of Science, vol. 6(8), pages 1-9, August.
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    More about this item

    Keywords

    Light-Emission; Economic Activity; Proxy;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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