Top Lights: Bright cities and their contribution to economic development

Richard Bluhm & Melanie Krause

#2018-041

Tracking the development of cities in emerging economies is difficult with conventional data. We show that satellite images of nighttime lights are a reliable proxy for economic activity at the city level, provided they are first corrected for topcoding. The commonly-used data fail to capture the true brightness of many cities. We present a stylized model of urban luminosity and empirical evidence which both suggest that these 'top lights' can be characterized by a Pareto distribution. We then propose a simple correction procedure which recovers the full distribution of city lights. Our results show that the brightest cities account for nearly a third of global economic activity. Applying this approach to cities in Sub-Saharan Africa, we find that primate cities are outgrowing secondary cities but are changing from within. Poorer neighborhoods are developing, but sub-centers are forming so that Africa's largest cities are also becoming increasingly fragmented.

JEL Classification: O10, O18, R11, R12

Keywords: Development, urban growth, night lights, top-coding, inequality

  


UNU-MERIT