Satellite Data Strongly Suggests That China, Russia and Other Authoritarian Countries Are Fudging Their GDP Reports (washingtonpost.com)

Christopher Ingraham, writing for The Washington Post: China, Russia and other authoritarian countries inflate their official GDP figures by anywhere from 15 to 30 percent in a given year, according to a new analysis of a quarter-century of satellite data. The working paper, by Luis R. Martinez of the University of Chicago, also found that authoritarian regimes are especially likely to artificially boost their gross domestic product numbers in the years before elections, and that the differences in GDP reporting between authoritarian and non-authoritarian countries can't be explained by structural factors, such as urbanization, composition of the economy or access to electricity. Martinez's findings are derived from a novel data source: satellite imagery that tracks changes in the level of nighttime lighting within and between countries over time.

Comments

Real GDP is overstated here in the USA too

[JoeyRox]

Real GDP is the net of domestic output minus price changes, ie inflation. Look into how our inflation measurements have been contorted over the years and you'll see how it's "grossly" under-reported, thus GDP is overstated.

US does as well

[crypticedge]

The US has as well ever since it made financial entity transactions part of GDP, something no other nation does.

Re:Authoritarian countries?

[rogoshen1]

Tell that to someone who grew up in the USSR or GDR -- and try to keep a straight face. It's certainly a cause for concern here and getting worse; but no - we're no where NEAR a true authoritarian regime.

Re:This research is pure bullshit from U of Chicag

[ShanghaiBill]

GDP is NOT night time light volume.

Of course not. But it is a rough proxy for GDP. Why would it systematically differ between authoritarian and non-authoritarian countries? An obvious answer is data fudging.

A city with street lights but no people do not produce GDP. On the other hand, a factory that only works in the daytime

Why would these differ between authoritarian and non-authoritarian countries?

China is known for "ghost cities", but they were never really that common, many of them are now occupied, and they would lead to under reporting of GDP, not the over reporting actually observed.

Re:This research is pure bullshit from U of Chicag

[Baloroth]

It's obviously not a perfect measure of GDP, but actually people have done the research and shown a strong link between the two. If, as you claim, you have a PhD (and it's in a relevant field: sorry, an English PhD gives you zero qualifications here), you're not only free, but should have the capability to put out your own research disproving this work. Of course, given the quality of logic in your post, I suspect you don't have that capability. For example:

A city with street lights but no people do not produce GDP.

The entire point of both a city and street lights is to have people. It's true that China has been building "ghost cities, but all that does is suggest that in fact the light-based estimate overestimates economic activity, which just makes the point in TFA that much stronger.

On the other hand, a factory that only works in the daytime, like in industrialized countries such as western europe and east China, do not have light volume at night.

Have you seen a factory at night before? Or even seen a factory in a movie at night? Most of them absolutely put out light at night (they're usually glittering beacons of light, in fact). In fact if they have smokestacks or chimneys they're required to or they're a huge safety risk to aircraft. Also lots (most?) factories in most climates run in mornings and evenings before/after sunrise, and it's not uncommon for them to run overnight: downtime is a huge waste of money when you have an expensive factory. In fact, factories not running overnight would be an indicator of economic weakness, such as happened to the US auto industry in the 2000s.