A Bright Idea for Measuring Economic Growth.

Most readers of this article are already familiar with images of “the earth at night.” Looking at such images, it is easy to see that the brightness of visible lights is strongly related to both population density and income per capita. The effect of population density shows up in the visibility of urban agglomerations, coastlines, river valleys, and the higher density of population along the paths of highways and railroads. Similarly, the Northeast of the United States is far brighter than the mountain West, even though they have similar levels of income. The effect of income is similarly easy to see. Sharp economic boundaries such as the inter-Korean border show up plainly. India, with a population density slightly higher than Japan’s, is significantly dimmer. The observation that income per capita is one of the determinants of visible light suggests that one might potentially use visible light to help measure income. In this paper, we explore the usefulness of these night lights data to economists studying issues related to economic growth at the national or local level. In particular, we ask to what extent lights data can augment or entirely replace data on gross domestic product. There are a number of obstacles to using lights visible from space to measure income, broadly falling into two categories. First, the relationship between economic activity and the true amount of light emanating from the earth’s surface is not constant across time and space. Light is a