Posted by: Democratic Thinker | September 7, 2009

GDP From Outer Space

A Brown University press release reports on estimating a country or region’s gross domestic product (GDP) by using satellite images of the area’s nighttime lights. See excerpt:


 

Night lights
Increased nighttime lighting indicates economic growth in Poland and Eastern Europe between 1992 (left, above) and 2002. Poland is in the top left quarter of each image.

Credit: NOAA and USAF Weather Agency

Brown Economists Measure GDP Growth from Outer Space



September 4, 2009 | Contact: Deborah Baum | (401) 863-2478

Measurements of economic growth often fall short for developing countries, particularly in sub-Saharan Africa, and are rarely calculated at all for cities throughout the world. In a new working paper, three Brown University economists suggest a way to improve GDP estimates for such areas by using images of nighttime lights as seen from outer space.

PROVIDENCE, R.I. [Brown University] — Outer space offers a new perspective for measuring economic growth, according to new research by three Brown University economists. In a National Bureau of Economic Research working paper, J. Vernon Henderson, Adam Storeygard, and David N. Weil suggest a new framework for estimating a country or region’s gross domestic product (GDP) by using satellite images of the area’s nighttime lights.

Reliable data on economic growth is hard to come by in many parts of the world — particularly in sub-Saharan Africa and other developing countries — and the data is often not calculated at all for cities. The authors cite the Penn World Tables, one of the standard compilations of data on income, which rank countries with grades A through D by the quality of their GDP and price data. While almost all industrialized countries receive a grade of A, nearly all sub-Saharan African countries get a grade of C or D, which is interpreted as roughly 30 or 40 percent margin of error. Several countries do not appear in the table, including Iraq, Myanmar, Somalia, and Liberia.

To improve these estimates, Henderson, Storeygard, and Weil suggest combining measured income data with the changes observed in a country’s “night lights” as seen from outer space. Using U.S. Air Force weather satellite picture composites, they look at changes in a region’s light density over a 10-year period. “Consumption of nearly all goods in the evening requires lights,” they write. “As income rises, so does light usage per person, in both consumption activities and many investment activities.”

(Read complete press release at original site)

Advertisements

Categories