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A Test of DMSP and VIIRS Night Lights Data for Estimating GDP and Spatial Inequality for Rural and Urban Areas

Author

Listed:
  • John Gibson

    (University of Waikato)

  • Susan Olivia

    (University of Waikato)

  • Geua Boe-Gibson

    (University of Waikato)

Abstract
Night lights, as detected by satellites, are increasingly used by economists, especially to proxy for economic activity in poor countries. Widely used data from the Defense Meteorological Satellite Program (DMSP) have several flaws; blurring, top-coding, lack of calibration, and variation in sensor amplification that impairs comparability over time and space. These flaws are not present in newer data from the Visible Infrared Imaging Radiometer Suite (VIIRS) that is widely used in other disciplines. Economists have been slow to switch to these better VIIRS data, perhaps because flaws in DMSP are rarely emphasized. We show the relationship between night lights and Indonesian GDP at the second sub-national level for 497 spatial units. The DMSP data are not a suitable proxy for GDP outside of cities. Within the urban sector, the lights-GDP relationship is twice as noisy using DMSP as using VIIRS. Spatial inequality is considerably understated by the DMSP data. A Pareto adjustment to correct for top-coding in DMSP data has a modest effect but still understates spatial inequality and misses much of the intra-city heterogeneity in the brightness of lights for Jakarta.

Suggested Citation

  • John Gibson & Susan Olivia & Geua Boe-Gibson, 2019. "A Test of DMSP and VIIRS Night Lights Data for Estimating GDP and Spatial Inequality for Rural and Urban Areas," Working Papers in Economics 19/11, University of Waikato.
    • Handle: RePEc:wai:econwp:19/11
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    File URL: https://repec.its.waikato.ac.nz/wai/econwp/1911.pdf
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    References listed on IDEAS

    as
    1. Bluhm, Richard & Krause, Melanie, 2022. "Top lights: Bright cities and their contribution to economic development," Journal of Development Economics, Elsevier, vol. 157(C).
    2. 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.
    3. Adriana Kocornik-Mina & Thomas K. J. McDermott & Guy Michaels & Ferdinand Rauch, 2020. "Flooded Cities," American Economic Journal: Applied Economics, American Economic Association, vol. 12(2), pages 35-66, April.
    4. J. Vernon Henderson & Adam Storeygard & David N. Weil, 2012. "Measuring Economic Growth from Outer Space," American Economic Review, American Economic Association, vol. 102(2), pages 994-1028, April.
    5. Frank Bickenbach & Eckhardt Bode & Peter Nunnenkamp & Mareike Söder, 2016. "Night lights and regional GDP," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(2), pages 425-447, May.
    6. Gibson, John & Datt, Gaurav & Murgai, Rinku & Ravallion, Martin, 2017. "For India’s Rural Poor, Growing Towns Matter More Than Growing Cities," World Development, Elsevier, vol. 98(C), pages 413-429.
    7. William Nordhaus & Xi Chen, 2015. "A sharper image? Estimates of the precision of nighttime lights as a proxy for economic statistics," Journal of Economic Geography, Oxford University Press, vol. 15(1), pages 217-246.
    8. Addison,Douglas M. & Stewart,Benjamin P., 2015. "Nighttime lights revisited : the use of nighttime lights data as a proxy for economic variables," Policy Research Working Paper Series 7496, The World Bank.
    9. Keola, Souknilanh & Andersson, Magnus & Hall, Ola, 2015. "Monitoring Economic Development from Space: Using Nighttime Light and Land Cover Data to Measure Economic Growth," World Development, Elsevier, vol. 66(C), pages 322-334.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    density; DMSP; inequality; night lights; VIIRS; Indonesia;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • 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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