Illuminating Economic Development in Indigenous Communities

There are over 1,000 First Nations and Inuit communities in Canada. However, the most comprehensive public data source on economic activity, the Community Well-Being (CWB) database, only includes consistent data for 357 of these communities every five years between 1991 and 2011. We propose an alternative measure of economic well-being that is available annually since 1992 for all First Nations, Inuit, and non-Indigenous communities in Canada: nighttime light density from satellites. Nighttime light data have been used by development economists to measure economic activity elsewhere and have been shown to be a flexible alternative to traditional measures of economic activity. We find that nighttime light density is a useful proxy for per capita income in the Canadian context and provide evidence of sample selection issues with the pre-existing indicators of well-being in First Nations and Inuit communities. We suggest that using nighttime light density overcomes the biased selection of communities into the CWB samples and thus may present a more complete picture of economic activity in Canada.