KTH/CESIS Working Paper Series in Economics and Institutions of Innovation
Night-Time Light Data: A Good Proxy Measure for Economic Activity?
(), Kevin Stolarick
(), Zara Matheson
() and JosÚ Lobo
Abstract: Research has suggested that night-time light (NTL) can be
used as a proxy for a number of variables, including urbanization, density,
and economic growth. But, just how close is the relationship between NTL
and economic activity? This paper uses a combination of correlation
analysis and geographically weighted regressions in order to examine the
relationship between the two. We use fine-grained geo-coded micro-data for
Swedish establishments and individuals, and match it with both radiance and
saturated light emissions. We find that the correlation between NTL and
economic activity is strong enough to make it a relatively good proxy for
population and establishment density, but the correlation is weaker in
relation to wages. In general, we find a stronger relation between light
and density values, than with light and total values. We also find a closer
connection between radiance light and economic activity, than with
saturated light. Further, we find the link between light and economic
activity, especially estimated by wages, to be slightly overestimated in
large urban areas, and underestimated in rural areas.
Keywords: Light-Emission; Economic Activity; Proxy; (follow links to similar papers)
JEL-Codes: O18; R10; (follow links to similar papers)
32 pages, June 10, 2013
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