Measuring GDP Growth from Space

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The image above is from a series of shots taken by satellite over the course of 11 years.  It will be used by scientists to get a better idea of how economies in developing countries are growing.  In many places, the data reported locally just isn’t reliable or robust enough to truly capture the rate of GDP growth, but measuring the output of lights may be a good substitute according to New Scientist.

NIGHT-TIME images taken from kilometres above the Earth could help us better understand the economies of some of the planet’s least developed countries. So say the US economists behind a method for measuring changes GDP using the intensity of street lights and other night-time lighting.

A better way of estimating GDP is badly needed, especially for poorer nations. Data collected by national governments is weak when it comes to informal sectors of the economy, such as street markets. In some countries, such as Liberia, economic information systems are so poor that meaningful data is sometimes non-existent.

Satellite images could help plug the gap. Nations tend to build new roads and expand residential areas as they become more wealthy, both of which increase the number of lights that can be seen from space.

As globalization continues apace, getting a read on developing nation growth will become very important for investors.  I thought that this method was a fascinating solution.

Sources:

Night-Time Photos Shed Light on Growing Economies (NewScientist)