Assessing Income Distribution at the District Level for India Using Nighttime Satellite Imagery

Abstract

Several studies have been carried out relating nighttime lights with economic activity. But most studies relating nighttime lights with economic activity have focused on associating higher totals in economic activity with higher sum of lights across regions. The question addressed in this paper is how best to model the relationship of nighttime lights with not just the wealthy but also the relatively worse-off within a region. The implications of such an exercise are immense with respect to ascertaining income distribution aspects of any area. The methods developed in this paper explore the relation between households in different income brackets at the district level for India, and the radiance-calibrated nighttime image of 2004. Besides the radiance-calibrated data of 2004, estimates of household incomes and number of households in different income brackets, made by Indicus Analytics (specialized economic research firm, based in New Delhi, India) were used. The results were mapped and insights were drawn for all districts based on their socio-economic profile. These results illustrate the advantage of using this easily available data for determining income inequalities, especially in information-deficient countries such as India.