Indian Economy and Nighttime Lights

TL;DR

This paper investigates the relationship between nighttime lights data from DMSP and VIIRS datasets and India's GDP to improve economic growth forecasting for developing economies.

Contribution

It introduces a novel analysis of nighttime lights as an indicator for Indian economic growth, addressing data volatility and inter-country linkages.

Findings

Significant correlation between nighttime lights and GDP measures.

Nighttime lights improve economic forecasting accuracy.

Insights into the use of satellite data for economic analysis.

Abstract

Forecasting economic growth of India has been traditionally an uncertain exercise. The indicators and factors affecting economic structures and the variables required to model that captures the situation correctly is point of concern. Although the forecast should be specific to the country we are looking at however countries do have interlinkages among them. As the time series can be more volatile and sometimes certain variables are unavailable it is harder to predict for the developing economies as compared to stable and developed nations. However it is very important to have accurate forecasts for economic growth for successful policy formations. One of the hypothesized indicators is the nighttime lights. Here we aim to look for a relationship between GDP and Nighttime lights. Specifically we look at the DMSP and VIIRS dataset. We are finding relationship between various measures of economy.