Measuring Economic Growth from Outer Space AbstractGDP growth is
often measured poorly for countries and rarely measured at all
for cities or subnational regions. We propose a readily
available proxy: satellite data on lights at night. We develop a
statistical framework that uses lights growth to augment
existing income growth measures, under the assumption that
measurement error in using observed light as an indicator of
income is uncorrelated with measurement error in national income
accounts. For countries with good national income accounts data,
information on growth of lights is of marginal value in
estimating the true growth rate of income, while for countries
with the worst national income accounts, the optimal estimate of
true income growth is a composite with roughly equal weights.
Among poor-data countries, our new estimate of average annual
growth differs by as much as 3 percentage points from official
data. Lights data also allow for measurement of income growth in
sub- and supranational regions.