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Left in the Dark? Oil and Rural Poverty

Author

Listed:
  • Brick Smith
  • Samuel Wills

Abstract

Do oil booms reduce rural poverty and inequality? To study this we measure rural poverty by counting people that live in darkness at night: combining high-resolution global satellite data on night-time lights and population from 2000-2013. We develop a measure that accurately identifies 74% of households as above or below the extreme poverty line when compared to over 600,000 household surveys. We find that both high oil prices and new discoveries increase illumination and GDP nationally. However, they also promote regional inequality because the increases are limited to towns and cities with no evidence that they benefit the rural poor.

Suggested Citation

  • Brick Smith & Samuel Wills, 2015. "Left in the Dark? Oil and Rural Poverty," OxCarre Working Papers 164, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    • Handle: RePEc:oxf:oxcrwp:164
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    Cited by:

    1. Lu, Yifan & Yamazaki, Satoshi, 2022. "Fish to fight: does catching more fish increase conflicts in Indonesia?," Working Papers 2022-02, University of Tasmania, Tasmanian School of Business and Economics.
    2. Christopher Hartwell & Roman Horvath & Eva Horvathova & Olga Popova, 2022. "Natural resources and income inequality in developed countries: synthetic control method evidence," Empirical Economics, Springer, vol. 62(2), pages 297-338, February.
    3. Jaimes, Richard & Gerlagh, Reyer, 2020. "Resource-richness and economic growth in contemporary U.S," Energy Economics, Elsevier, vol. 89(C).
    4. Arkadiusz Piwowar & Maciej Dzikuc, 2020. "Poverty and Social Exclusion: Is this a Problem in Rural Areas in the Visegrad Group Countries?," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 45-54.
    5. Pierre-Louis Vézina, 2021. "The Oil Nouveau-Riche and Arms Imports," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 30(4), pages 349-369.
    6. Ampofo, Akwasi & Cheng, Terence C. & Doko Tchatoka, Firmin, 2022. "Oil extraction and spillover effects into local labour market: Evidence from Ghana," Energy Economics, Elsevier, vol. 106(C).
    7. Boslett, Andrew & Hill, Elaine & Ma, Lala & Zhang, Lujia, 2021. "Rural light pollution from shale gas development and associated sleep and subjective well-being," Resource and Energy Economics, Elsevier, vol. 64(C).
    8. Gradstein, Mark & Klemp, Marc, 2016. "Can Black Gold Shine? The Effect of Oil Prices on Nighttime Light in Brazil," CEPR Discussion Papers 11686, C.E.P.R. Discussion Papers.
    9. Armand Totouom, 2023. "Oil dependency, political institutions, and urban–rural disparities in access to electricity in Africa," Natural Resources Forum, Blackwell Publishing, vol. 47(1), pages 114-133, February.
    10. Ola Hall & Mattias Ohlsson & Thortseinn Rognvaldsson, 2022. "Satellite Image and Machine Learning based Knowledge Extraction in the Poverty and Welfare Domain," Papers 2203.01068, arXiv.org.
    11. Zuo, Na & Zhong, Hua, 2020. "Can resource policy reverse the resource curse? Evidence from China," Resources Policy, Elsevier, vol. 68(C).
    12. Regina Stéphanie Seri, 2021. "How giant discoveries of natural resources impact sovereign debt ratings in developing and emerging countries ?," Working Papers hal-03144330, HAL.
    13. Thomas McGregor & Samuel Wills, 2016. "Surfing A Wave Of Economic Growth," OxCarre Working Papers 170, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    14. McGregor, Thomas & Wills, Samuel, 2016. "Natural Assets: Surfing a Wave of Economic Growth," Working Papers 2016-06, University of Sydney, School of Economics.
    15. Dickinson, Jeffrey, 2020. "Planes, trains, and automobiles: what drives human-made light?," MPRA Paper 117126, University Library of Munich, Germany.
    16. Ian McCallum & Christopher Conrad Maximillian Kyba & Juan Carlos Laso Bayas & Elena Moltchanova & Matt Cooper & Jesus Crespo Cuaresma & Shonali Pachauri & Linda See & Olga Danylo & Inian Moorthy & Myr, 2022. "Estimating global economic well-being with unlit settlements," Nature Communications, Nature, vol. 13(1), pages 1-8, December.
    17. John Gibson & Susan Olivia & Geua Boe‐Gibson, 2020. "Night Lights In Economics: Sources And Uses," Journal of Economic Surveys, Wiley Blackwell, vol. 34(5), pages 955-980, December.
    18. Graham A. Davis, 2020. "Large-sample evidence of income inequality in resource-rich nations," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 33(1), pages 193-216, July.
    19. Regina Stéphanie Seri, 2021. "How giant discoveries of natural resources impact sovereign debt ratings in developing and emerging countries ?," CERDI Working papers hal-03144330, HAL.
    20. Chan, Jeff & Karim, Ridwan, 2023. "Oil royalties and the provision of public education in Brazil," Economics of Education Review, Elsevier, vol. 92(C).

    More about this item

    Keywords

    oil; rural poverty; poverty measurement; regional inequality; night-time lights; urbanization;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • 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
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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