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Aggregation Bias in Proxy Measurement: Nighttime Lights and Local Economic Activity

Davide Fiaschi, Angela Parenti, Cristiano Ricci

arXiv 16 Jul 2026 · Econometrics

arXiv:2607.14825 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This paper studies when high-resolution signals aggregated to administrative units can recover unobserved local economic activity. We develop a reverse-regression framework for signals generated by activity but used to predict it at coarser spatial supports. The main theorem decomposes predictive elasticity into elementary elasticity, reverse-regression attenuation, and a spatial aggregation term driven by unit size and within-unit dispersion, showing aggregation pulls elasticities toward one. Monte Carlo evidence confirms the decomposition and clarifies transferability conditions. Applications to VIIRS nighttime lights and local GDP or income in Brazil, Italy, the United States, Indonesia, and Kenya support local calibration mainly in richer contexts.

Citation extraction

18
references
33
in-text mentions
18
distinct cited
0
self-citations
13,977
main-text words

appendix boundary found by appendix_command · 61% of the source is main text. Read the extracted text to check this.

Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Huber, J. D. and L. Mayoral (2024, February) (2024) Economic development in pixels: The limitations of nightlights and new spatially disaggregated measures of consumption and poverty0.81142100%
2Abbes, A. B., J. Machicao, P. L. Corrêa, A. Specht, R. Devillers, J.… (2024) Deepwealth: A generalizable open-source deep learning framework using satellite images for well-being estimation0.73732100%
3Gibson, J., B. Kim, and C. Li (2024) Luminosity and local economic growth0.73732100%
4Jean, N., M. Burke, M. Xie, W. M. Davis, D. B. Lobell, and S. Ermon (2016) Combining satellite imagery and machine learning to predict poverty0.73732100%
5Galimberti, J. K (2020) Forecasting gdp growth from outer space0.58531100%
6Bluhm, R. and G. C. McCord (2022) What can we learn from nighttime lights for small geographies? measurement errors and heterogeneous elasticities0.51121100%
7Durbin, J (1954) Errors in variables0.51121100%
8Henderson, J. V., A. Storeygard, and D. N. Weil (2012) Measuring economic growth from outer space0.51121100%
9Wald, A (1940) The fitting of straight lines if both variables are subject to error0.51121100%
10Cannari, L. and G. Iuzzolino (2009) Le differenze nel livello dei prezzi al consumo tra nord e sud0.40511100%

Showing the top 10 of 18 scored citations.