NIGHT LIGHTS IN ECONOMICS: SOURCES AND USES1

Night lights, as detected by satellites, are increasingly used by economists, typically as a proxy for economic activity. The growing popularity of these data reflects either the absence, or the presumed inaccuracy, of more conventional economic statistics, like national or regional GDP. Further growth in use of night lights is likely, as they have been included in the AidData geoquery tool for providing subnational data, and in geographic data that the Demographic and Health Survey links to anonymized survey enumeration areas. Yet, this ease of obtaining night lights data may lead to inappropriate use, if users fail to recognize that most of the satellites providing these data were not designed to assist economists, and have features that may threaten validity of analyses based on these data, especially for temporal comparisons, and for small and rural areas. In this paper, we review sources of satellite data on night lights, discuss issues with these data, and survey some of their uses in economics.     

Urban land expansion in Indonesia 1992–2012: evidence from satellite‐detected luminosity

Land conversion to urban use typically accompanies economic development but raises concerns about food security. Debates of these issues often rely on incomplete and incompatible evidence. This study uses satellite‐detected luminosity, from 1992 to 2012, to examine the urban land expansion of 41 major urban areas in Indonesia. The trend annual expansion rate is 2.0 per cent, which is comparable to the rate for India and just one‐third of the rate for China, as estimated with the same data and methods. Prior to the Asian Financial Crisis in 1997/98, the rate of urban expansion was faster, and the income elasticity of urban expansion was much higher. About 85 per cent of the area of urban expansion had formerly been grassland, shrub or woodland, and just 7.0 per cent was former cropland so food security concerns about urban expansion may be overstated.