April 21, 2024

North Korea by night: the technical side

For the tech-savvy, Travis Pope gives a walkthrough of the intricacies behind luminosity-based N.Korea studies

Luminosity analysis is the study of satellite images taken of the earth at night. The basic premise is that lights can serve as a proxy for Gross Domestic Product (GDP), as most modern economic activity involves lights visible from space. Analysis typically focuses on light density – the value of luminosity divided by geographic area.

A 2012 paper from J. Vernon Henderson, Adam Storeygard, and Robert Weil finds that the elasticity of GDP to lights is 0.28 – that is, a 100 percent increase in a country’s average light density is associated with a 28 percent increase in GDP. However, the strength of this relationship varies significantly across countries, depending on level of development and other factors. Another paper, from Xi Chen and William D. Nordhaus, finds that the inclusion of luminosity data improves economic estimates for countries with low quality data, such as North Korea or Myanmar, but is of little use in developed countries with quality data.

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