Using Nighttime Luminosity as a Proxy for Economic Growth in Africa: Is It a Bright Idea?

In this paper, we question whether night light luminosity data can be used as an alternative measure of gdp in 49 African countries. For this to be proven true, evidence of significant relationships between night light data and gdp time series variables needs to be confirmed through empirical analysis. In differing from previous studies, we employ pooled mean group (pmg) cross sectional cointegration estimators and wavelet coherence tools to examine the cointegration relationships and time-frequency synchronizations between gdp and dmsp-ols night light intensity for annual data collected between 1992 and 2012. All in all, we find little evidence of significant relationships between nighttime data and gdp for individual African countries and therefore caution policymakers in strictly using dmsp-ols data to create synthetic measures of economic growth. Possible avenues for future research are further recommended at the end of the study. [ABSTRACT FROM AUTHOR]