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Bright Lights, Big Cities : measuring national and subnational economic growth in Africa from outer space, with an application to Kenya and Rwanda (English)

This paper uses the night lights (satellite imagery from outer space) approach to estimate growth in and levels of subnational 2013 gross domestic product for 47 counties in Kenya and 30 districts in Rwanda. Estimating subnational gross domestic product is consequential for three reasons. First, there is strong policy interest in how growth can occur in different parts of countries, so that communities can share in national prosperity and not get left behind. Second, subnational entities want to understand how they stack up against their neighbors and competitors, and how much they contribute to national gross domestic product. Third, such information could help private investors to assess where to undertake investments. Using night lights has the advantage of seeing a new and more accurate estimation of informal activity, and being independent of official data. However, the approach may underestimate economic activity in sectors that are largely unlit notably agriculture. For Kenya, the results of the analysis affirm that Nairobi County is the largest contributor to national gross domestic product. However, at 13 percent, this contribution is lower than commonly thought. For Rwanda, the three districts of Kigali account for 40 percent of national gross domestic product, underscoring the lower scale of economic activity in the rest of the country. To get a composite picture of subnational economic activity, especially in the context of rapidly improving official statistics in Kenya and Rwanda, it is important to estimate subnational gross domestic product using standard approaches (production, expenditure, income).

Details

  • Author

    Bundervoet,Tom, Maiyo,Laban, Sanghi,Apurva

  • Document Date

    2015/10/28

  • Document Type

    Policy Research Working Paper

  • Report Number

    WPS7461

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    Kenya,

    Rwanda,

  • Region

    Africa,

  • Disclosure Date

    2015/10/28

  • Disclosure Status

    Disclosed

  • Doc Name

    Bright Lights, Big Cities : measuring national and subnational economic growth in Africa from outer space, with an application to Kenya and Rwanda

  • Keywords

    gross domestic product;constant local currency;amount of oil;country fixed effect;national poverty line;goodness of fit;revenue sharing formula;diseconomies of scale;growth in agriculture;asian financial crisis;national account;national gdp;natural log;long-term growth;standard error;rural population;private investor;spatial distribution;gas flare;agrarian countries;real gdp;average share;survey data;standard approach;tertiary sector;proxy measure;subsistence agriculture;ecological economics;composite picture;satellite imagery;global distribution;Informal Economy;large population;satellite data;vegetation cover;development policy;agricultural performance;agricultural activity;livestock policies;global poverty;urban agglomeration;national assembly;open access;joint product;equal share;informal activity;panel regression;independent country;land area;estimation method;positive relationship;coefficient estimate;vertical line;short-term fluctuation;small country;electrical power;high share;kilowatt hour;fiscal capacities;political events;agricultural sector;vegetation data;small population;power outage;regression results;secondary city;rwandan genocide;agricultural output;funds transfer;global incidence;national border;empirical model;inland region;coastal area;urban population;south sudan;temporal coverage;satellite sensors;oil extraction;private investment;flammable gas;official statistic;integer range;fiscal effort;oil well;outer space;tax base;aggregate growth;household survey;

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Citation

Bundervoet,Tom Maiyo,Laban Sanghi,Apurva

Bright Lights, Big Cities : measuring national and subnational economic growth in Africa from outer space, with an application to Kenya and Rwanda (English). Policy Research working paper,no. WPS 7461 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/912151468188369841/Bright-Lights-Big-Cities-measuring-national-and-subnational-economic-growth-in-Africa-from-outer-space-with-an-application-to-Kenya-and-Rwanda