Changes in the Association between GDP and Night-Time Lights during the COVID-19 Pandemic: A Subnational-Level Analysis for the US

Abstract

Night-time light (NTL) data have been widely used as a remote proxy for the economic performance of regions. The use of these data is more advantageous than the traditional census approach is due to its timeliness, low cost, and comparability between regions and countries. Several recent studies have explored monthly NTL composites produced by the Visible Infrared Imaging Radiometer Suite (VIIRS) and revealed a dimming of the light in some countries during the national lockdowns due to the COVID-19 pandemic. Here, we explicitly tested the extent to which the observed decrease in the amount of NTL is associated with the economic recession at the subnational level. Specifically, we explore how the association between Gross Domestic Product (GDP) and the amount of NTL is modulated by the pandemic and whether NTL data can still serve as a sufficiently reliable proxy for the economic performance of regions even during stressful pandemic periods. For this reason, we use the states of the US and quarterly periods within 2014–2021 as a case study. We start with building a linear mixed effects model linking the state-level quarterly GDPs with the corresponding pre-processed NTL data, additionally controlling only for a long-term trends and seasonal fluctuations. We intentionally do not include other socio-economic predictors, such as population density and structure, in the model, aiming to observe the ‘pure’ explanatory potential of NTL. As it is built only for the pre-COVID-19 period, this model demonstrates a rather good performance, with R2 = 0.60, while its extension across the whole period (2014–2021) leads to a considerable worsening of this (R2 = 0.42), suggesting that not accounting for the COVID-19 phenomenon substantially weakens the ‘natural’ GDP–NTL association. At the same time, the model’s enrichment with COVID-19 dummies restores the model fit to R2 = 0.62. As a plausible application, we estimated the state-level economic losses by comparing actual GDPs in the pandemic period with the corresponding predictions generated by the pre-COVID-19 model. The states’ vulnerability to the crisis varied from ~8 to ~18% (measured as a fraction of the pre-pandemic GDP level in the 4th quarter of 2019), with the largest losses being observed in states with a relatively low pre-pandemic GDP per capita, a low number of remote jobs, and a higher minority ratio.