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Top Lights: Bright cities and their contribution to economic development

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  • Bluhm, Richard

    (Institute of Macroeconomics, Leibniz University Hannover, and UNU-MERIT)

  • Krause, Melanie

    (Hamburg University, Department of Economics)

Abstract

Tracking the development of cities in emerging economies is difficult with conventional data. We show that satellite images of nighttime lights are a reliable proxy for economic activity at the city level, provided they are first corrected for topcoding. The commonly-used data fail to capture the true brightness of many cities. We present a stylized model of urban luminosity and empirical evidence which both suggest that these 'top lights' can be characterized by a Pareto distribution. We then propose a simple correction procedure which recovers the full distribution of city lights. Our results show that the brightest cities account for nearly a third of global economic activity. Applying this approach to cities in Sub-Saharan Africa, we find that primate cities are outgrowing secondary cities but are changing from within. Poorer neighborhoods are developing, but sub-centers are forming so that Africa's largest cities are also becoming increasingly fragmented.

Suggested Citation

  • Bluhm, Richard & Krause, Melanie, 2018. "Top Lights: Bright cities and their contribution to economic development," MERIT Working Papers 2018-041, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  • Handle: RePEc:unm:unumer:2018041
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    More about this item

    Keywords

    Development; urban growth; night lights; top-coding; inequality;
    All these keywords.

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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