The Wald test is a way of testing the significance of particular explanatory variables in a statistical model. (H. KyngaÈs and M. Rissanen).
Light. Just meditate on it for one moment. Without light human activity would have probably not developed as much as we know it today. Perhaps our eye as an organ would have been different if there were no light. Our so called “evolution” would have taken a different path. Just a few years ago still, scientists believed that no creature could live without light. Boy …. they’ve been proven wrong!
Now think of how light fits our everyday capitalistic world. The intensity of light creates atmospheres in story books. Different patterns of light gives an image and a continuously changing pattern of light gives a video. Light has even entered the lyrics of hit songs – Ellie Goulding.
“You show the lights that stop me turn to stone
You shine it when I’m alone”
Light is a source of strength. When there is light, there is hope.
So how does light fit with economics?
A number of studies have used light patterns from space to calculate economic activity or as a proof of economic development. Recently I stumbled on a paper published by Vernon Henderson, Adam Storeygard and David N. Weil. They attempted to find GDP growth rate based on growth in lights. What they found is that growth in light is not always in line with official GDP growth. That is to be expected since GDP is not an accurate measure of economic development as they authors argue. Which brings me to the points I want to make.
1. Using light as a measure of economic development also has its flaws. It does not take into account all the economic activities that occur and assumes that the more light there is the more economic activities there are. Which would be wrong considering in some countries – such as Saudi Arabia – houses are illuminated with a thousand bulbs. Whereas the Nordic countries tend to be more conservative on turning the lights at home – probably cause its too cold to go out at night. So that doesn’t mean Saudi Arabia is a more developed country than say Sweden.
2. Instead of trying to build sophisticated models to determine economic development using light as a variable, why not just accept that this road is a dead end and instead focus on the patterns of light. Light is a source of hope. So if there is a light at night means there are some human activities there during the day. As such in remote areas human activities could be pinpointed and explanatory maps could be drawn to give an idea of the economic networks that exists in these areas. I.e. Which village trade with which village. Or how farmers who live close to solitary lives trade their products. In short economic network maps could be drawn. And these could be used to better develop transport networks to expand economic activities further. This approach still recognizes that a light at night may signify a source of economic activity during the day but instead of calculating, it seeks to improve the efficiency of economic activities and give them opportunities to expand.
3. I recently watched a french documentary called Thalassa. In the show, a man made a simple point: Nowadays governments following IMF policies always seek to have more lights at night and of different colours. That creates an ambiance at night of economic development, of happiness in the country. Light is also a political tool ! And he is correct. In Mauritius the current government has built a lot of infrastructure and recently a bridge on one of the business highway. They made sure the bridge was well lit at night. So are all the new roads.
Photo from: http://www.freeimageslive.co.uk