A University of Sydney-bound economist has mapped people’s access to electricity to identify economic inequality in oil-rich countries.
Oil booms have not benefited the poorest people in oil-rich countries, says a Sydney-bound economist who has co-developed a new method of mapping global poverty using satellite imagery.
Oxford University’s Dr Samuel Wills, who joins the University of Sydney’s School of Economics later this year, worked with colleagues at the British university to analyse two separate datasets from satellites.
The first dataset showed images of all the areas of the world that light up at night, and the second estimated population using images of roads, buildings and other signs of human habitation. Both satellites covered every square kilometre of the globe, amounting to 100 million data points every year.
In doing so, the researchers pinpointed populations without access to electricity.
They found this is a faster, cheaper and more thorough method of measuring people in poverty after comparing it to over 600,000 household surveys.
While the datasets have been used to track the effects of oil booms on the rural poor, the researchers suggest this measure can have other applications.
“We hope these maps will be an easy way for NGOs and aid agencies to target areas of concentrated rural poverty,” said Dr Wills.
“Switching on the lights has a large payoff because it lets people work and study after the sun goes down. People therefore tend to turn the lights on very soon after they leave extreme poverty,” he said.
The study shows the benefits of oil discoveries and high oil prices in oil-rich countries appear to be limited to towns and cities.
“Our results suggest oil booms have not brought benefits to the poorest in oil-rich countries,” said Dr Wills.
“Indeed, the good fortune of discovering oil benefits only part of the population.
“If anything, they create greater inequality as oil-rich countries appear to be less efficient at converting growth to reducing poverty than those countries without oil,” he said.
The study notes 30 percent of people outside the OECD live in darkness at night, including half of Africa. The paper, which can be downloaded here, lists nearly 40 countries where inequalities between rich and poor are greatest.
For example, in 2013, it finds that in the Democratic Republic of Congo 97 percent of people in unlit areas were poor compared with 33 percent in lit areas. In Bolivia, 82 percent of people left in the dark were poor, compared to just 15 percent of those with lighting.
In the ten years after an oil discovery, the percentage of rural poor living in unlit areas fell by only 1 percent on average compared to countries where oil is not found. In contrast, oil discoveries in that period increased the illumination in cities and towns by 14 percent and 22 percent respectively, as compared with a control group.
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