Davide Fiaschi (University of Pisa): Nighttime lights as a measure of local economic activity

This paper investigates the use of nighttime lights as a proxy for local economic activity, focusing on Italy, Brazil, and the United States at various levels of geographical aggregation using high-resolution nightlight data from NASA’s Black Marble project. Nighttime lights appear as a robust proxy for economic activity, proxied by personal income or GDP, with elasticity values consistently around 1 across different administrative levels when all variables are expressed in density and a correction for the size of the unit of observation is inserted in the estimate as well as a control for time. Therefore, our findings support an educated use of nighttime lights as proxy for local economic activity.