Using night light emissions for the prediction of local wealth

Abstract

Nighttime illumination can serve as a proxy for economic variables in particular in developing countries, where data are often not available or of poor quality. Existing research has demonstrated this for coarse levels of analytical resolution, such as countries, administrative units or large grid cells. In this article, we conduct the first fine-grained analysis of night lights and wealth in developing countries. The use of large-scale, geo-referenced data from the Demographic and Health Surveys allows us to cover 39 less developed, mostly non-democratic countries with a total sample of more than 34,000 observations at the level of villages or neighborhoods. We show that light emissions are highly accurate predictors of economic wealth estimates even with simple statistical models, both when predicting new locations in a known country and when generating predictions for previously unobserved countries.