By Brock Smith, Assistant Professor of Economics, Montana State University, Thomas McGregor, PhD candidate in Economics, University of Oxford, and Samuel Wills, ESRC Future Research Leaders Fellow in the Department of Economics, Oxford University. Originally published at VoxEU.
Measuring poverty is expensive. It involves running surveys in faraway places, which are slow and have bad coverage. The global standard, the World Bank Poverty Rate (World Bank 2016), covers less than one third of countries in any given year.
In a recent working paper, we use satellites to measure rural poverty, by counting how many people live in darkness at night (Figure 1) (Smith and Will 2016). This is fast, cheap, accurate and covers the whole world with a 1km2 resolution at regular intervals.
Figure 1 Rural poverty map: Tanzania, 2010
Note: For more examples of rural poverty maps see: https://samuelwills.wordpress.com/poverty-and-darkness/
Source: Image by Thomas McGregor.
Darkness and Poverty
We use two types of satellites to count people living in darkness. The first, from the US Defence Meteorological Satellite Program, measures the amount of light emitted at night. The second, called LandScan, estimates population using images of roads, buildings and land cover. The satellites cover every square kilometre of the planet’s surface, 100 million data points every year.
Being poor means not being able to meet basic needs like food, shelter, and sanitation. Lighting is only a small part of this. Switching on the lights has a large payoff, however, because it lets people work and study after the sun goes down. People tend to improve their lighting from kerosene to electricity soon after they leave extreme poverty. At this point illumination jumps dramatically and starts to appear in our database: a standard kerosene lamp only delivers 1-6 lux at useful distances, while a 60W electric bulb delivers 100 lux (the western standard for reading is 300 lux).
Light has previously been shown to be a useful, objective way to measure GDP. It has been used to cast doubt on developing countries’ self-reported GDP (Henderson et al. 2012), track the proceeds of piracy into Somalia’s hinterland (Shortland 2011), and expose the favouritism that dictators give to their home towns (Hodler and Raschky 2014).
Looking for poverty under lights is like looking for lost keys under a street lamp. It is better to focus on the darkness. Our paper is the first to focus on the 30% of people outside the OECD, or 50% of people in Africa, who live in darkness at night.
Studying people in darkness is a fast, cheap and accurate way to measure poverty. We compared our measure more than 600,000 DHS household surveys and find that darkness accurately identifies up to 83% of people as above or below the poverty line. For example in the Democratic Republic of Congo the share of poor living in unlit areas at night is 97%, compared to 33% in lit areas; in Bolivia 82% of people in unlit areas are poor, compared to 15% in lit areas.
Tracing the Proceeds of Oil Booms
Darkness lets us study whether oil booms reduce poverty and inequality.
Total lights in oil-rich countries tend to increase during oil booms. In the period 2002-2013, when the price of Brent crude rose from $20 to over $110 per barrel, illumination and GDP per capita in oil-rich countries grew by nearly one third relative to countries without oil. On average, countries that make a giant oil discovery with a net present value worth 100% of GDP see total lighting increase by almost one fifth, and GDP by 8% after ten years, compared to countries that don’t make discoveries.
These booms do not benefit the rural poor. All the extra light during the 2000s oil price boom came from cities and towns, in which illumination grew by 15% and 38%, respectively. The share of people living in darkness stayed the same. New lights did not turn on, and the poor did not move for better opportunities elsewhere. Giant oil discoveries show the same effect. In these cases lighting in towns and cities grew by 15% and 22% respectively after 10 years, but did not cause any lights to be switched on in rural areas. There is some evidence, though, that oil discoveries prompted around 1% of the rural poor to move to towns.
If Oil Doesn’t Turn on the Lights, What Does?
Evidence suggests that rural areas are steadily becoming illuminated around the world but, if oil booms don’t hasten the process, what causes this to happen?
Looking around the world we find that the probability of an unlit cell becoming lit is increased when it is adjacent to existing lit cells, close to the capital, has a high population density, or is in a country with high aggregate light growth since the start of the sample. We do not find that the first three mechanisms are more active in oil-dependent countries during a price boom. If anything, oil-rich countries are less efficient at converting growth into lower poverty than other countries.
This work provides, for the first time, global evidence that oil systematically increases inequality in the countries that discover it. Using darkness to measure poverty also opens up possibilities for allocating aid and testing policies designed to improve the lives of the world’s poor. The first step in winning the war on poverty is to know where the enemy is.
References
Henderson, J. V., Storeygard A. and Weil D. N. (2012), “Measuring economic growth from outer space”, The American Economic Review, 994–1028.
Hodler, R. & Raschky, P. (2014), “Regional Favoritism”, The Quarterly Journal of Economics, 129(2), 995-1033.
Shortland, A. (2011), “‘Robin Hook’: The Developmental Effects of Somali Piracy.”
Smith, B. and Wills, S. (2016), “Left in the Dark? Oil and Rural Poverty”, OxCarre Working Paper 164, Department of Economics, University of Oxford.
World Bank (2016), Poverty & equity data. http://povertydata.worldbank.org/poverty/home/
9 comments
Comments are closed.
“Oil Booms Leave the Poor in the Dark” — you mean those not previously left homeless by the last housing boom, and thus lucky enough to have a darkened home to live in, yes?
———————-
O/T (but too amusing to resist): Disruptive innovation, people! Just saw a TV ad for ComfortClickBelt.com, which is a belt that has some fancy high-tech buckle-ratchet deal which – wait for it – allows you to (gasp!) *adjust* the belt to the current state of your waist. You know, exactly what those old-fashioned belts with the oh-so-unsightly “multiple holes” allowed one to do, but in a way that is not so embarrassingly “last century” – and much more likely to break after just a few uses. Very new-economy, that latter feature.
Awaiting next law firm infomercial trolling for patsies, er, clients in latest hacked buckle disaster. The Internet of Things has so many possibilities, why not notch another one?
By the standards of the time, the U.S. was a developed and wealthy nation in 1930s, yet many of our rural areas were dark until FDR began a deliberate program of electrification. So simply having wealth isn’t enough (especially if it’s based on things like oil that don’t require national development to exploit). You also need the political ability and will to use that wealth for the benefit of the average (or poor) citizen. That is what is lacking in much of the “third world”, and (it seems) in much of the “developed” world as well.
Darkness at night is bliss. I shut my inverter off whenever I’m not using it because I love the darkness. This is a luxury I cherish more than good scotch.
Just speaking for the ‘down to’ 17% who don’t fit the study… waste not, want not.
Interesting study. I am left with the impression that once again, people interested in reducing poverty have come up with a clever method to prove an argument or gain information to bolster their position. All the while, the individuals driven by greed and no moral sense to relieve human suffering smile slyly and say- very interesting- and ignore the findings.
We don’t need more evidence about poverty. We need the will and effective strategies to eliminate it. Envisioning a world, or community living without poverty is possible. Neoliberalism is the latest counter revolution designed to roll back the social gains and enlightenment brought about by the New Deal.
The elite goal has alway been to keep the underclass in the dark. Poverty exists by design. One vision entails people joining together to solve social problems. The other vision seeks an join people in common cause to defeat an external enemy- the evil other. Fear truly is the strongest human motivating factor. It is the fulcrum on which human development pivots.
The dead giveaway of a ruler not interested in eliminating poverty is one focusing on keeping its citizens safe. You will be safe but poor. A win-win for the elite class.
The world is a dangerous place, but by far the greatest danger faced is the need for shelter, regular meals, and meaningful work. Spend energy and resources on that, and lights will spread throughout the world. Keep supporting the narrow minded thinking driving our political economy today and the view form space will reveal isolated areas of brilliant light surrounded by vast darkness. A new dark age.
This.
Income inequality, food insecurity, lack of housing, crushing amounts of private debt–these are all known quantities and have been for some time now. It says far more about us as a people/species that we know this and yet refuse to do anything about it.
If poverty starts to get eliminated, the population will demand to use their countries’ resources. Which means they won’t export it to the rich countries as much, nor will they allow most of the profits to be exported. Imperial centres will not allow that and will use any means, including wars to prevent that. Poverty exists for a reason. Plenty of countries have become rich. We know how it’s done, but we (rich countries, comprador elites) don’t actually want to do it.
The author of the study has possibly never visited wealthy areas where, for whatever reason, houses are mostly dark and unoccupied. Not the nouveau riche McMansions, the old money.
Paraphrasing David Harvey, if we had a war on wealth poverty would be eradicated tomorrow.
Interesting article though I come to a different conclusion. If you want to understand why so much of the world is so poorly lit (particularly oil export dependent economies) you need only look at those parts of the world that are so well lit (often the countries importing said oil at great discount). Besides the ecological costs, I don’t think the oil is the problem (it is a resource not an ideology), the violent, corrosive politics of oil are the problem, and the importance of oil in the “rich” nations underline this.