Measuring Economic Growth From Outer Space

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GDP growth is poorly measured for many countries and rarely measured for cities at all. Given the low quality of GDP measures for countries and the almost total absence of GDP measures for sub-national units such as cities, we propose a readily available proxy: satellite data on lights at night. The best use of lights data is to examine growth in GDP rather than GDP levels, so that cross-country differences in how lights spatially and culturally reflect consumption are differenced out.

The figure above contrasts the big increase in lights from 1992 to 2002 in the Eastern European countries of Poland, Hungary, and Romania with the distinct dimming of lights to the east in the former Soviet Republics of Moldova and the Ukraine, which endured a harsh transition process.

Vox.

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