Spatial Inequality of Districts in India From Outer Space : Evidence Across DMSP and VIIRS Satellites

Nightlight is used as a proxy for economic activity at the subnational level. Two types of nightlight data are mainly available- Defense Meteorological Satellite Program (DMSP), available from 1992-2013, and Visible Infrared Imaging Radiometer Suite (VIIRS), available from 2012. In this study, we examine which type of nightlight is best suited to represent economic activity and spatial inequality at the sub-national level in India. We analyse the interrelationship between i) consumption expenditure and nightlight at the sub-district level and ii) consumption inequality and nightlight inequality at the district level (601 districts) based on data from 5700 sub-districts in India. Using ordinary least squares, weighted least squares and quantile regression estimates, we find that VIIRS nightlight is more suitable to represent economic activity and spatial inequality at the subnational level. We find DMSP nightlight inequality is understated than VIIRS nightlight inequality due to blurring issues. Further, we find nightlight inequality is positively associated with consumption inequality