Uncovering the veil of night light changes in times of catastrophe

Abstract

Natural disasters have large social and economic consequences.However, adequate economic and social data to study subnational economic effects of these negative shocks are typically difficult to obtain especially in low-income countries. For this reason, the use of night light data is becoming increasingly popular in studies which aim to estimate the impacts of natural disasters on local economic activity.However, it is often unclear what observed changes in night lights represent exactly. In this paper, we examine how changes in night light emissions following a severe hurricane relate with local population, employment, and income statistics.We do so for the case of Hurricane Katrina, which struck the coastline of Louisiana and Mississippi in August 2005.Hurricane Katrina is an excellent case for this purpose as it is one of the biggest hurricanes in recent history in terms of human and economic impacts, it made landfall in a country with high-quality sub-national socioeconomic data collection, and it is covered extensively in the academic literature. We find that overall night light changes reflect the general pattern of direct impacts of Katrina as well as indirect impacts and subsequent population and economic recovery.Our results suggest that change in light intensity is mostly reflective of changes in resident population and the total number of employed people within the affected area and less so but positively related to aggregate income and real GDP.