Estimating Economic Impact Through Nighttime Light Imagery Case Studies of COVID-19 and Abrogation of Article-370 in J&K

Abstract

The official estimates of GDP data at sub-national levels are generally not available in developing countries. If available, they are available with a considerable lag of 2-3 years. In times of economic shocks like COVID-19 and the abrogation of Article-370, the unavailability of economic data at the sub-national levels make it difficult to assess the real impact of the shocks at the sub-national level. The present study exploits the existing literature of using nighttime light data as a proxy of economic activity to estimate the economic loss at the sub-national level. We use nighttime light data obtained from SNPP-VIIRS satellite imagery. For the case of COVID-19, the study analyses the impact on the nighttime light at the national, state and district level. We also adopt the spatial approach to estimate the economic impact of COVID-19 for the districts of Uttar Pradesh. The colorized difference images depict the changes in light levels during and after the lockdown. Statistical analysis is used to estimate the impact for categories of the districts in the country. For the case of abrogation of Article-370, we first ascertain the utility of the nighttime lights for estimating the economic activity in hilly areas of the country. Then we estimate that the economic activities in the districts of the Kashmir region were more affected in comparison to the districts of the Jammu region due to the abrogation. We find that the estimated negative impact in the Kashmir region was small enough in magnitude to be set off by the growth in the districts of the Jammu region to achieve an overall growth at the state level.