Policy Research Working Paper 9052 Public Disclosure Authorized Can We Rely on VIIRS Nightlights to Estimate the Short-Term Impacts of Natural Disasters? Public Disclosure Authorized Evidence from Five Southeast Asian Countries Emmanuel Skoufias Eric Strobl Thomas Tveit Public Disclosure Authorized Public Disclosure Authorized Poverty and Equity Global Practice October 2019 Policy Research Working Paper 9052 Abstract Visible Infrared Imaging Radiometer Suite (VIIRS) night- studies of specific disasters, and (ii) fixed effect regression lights are used to model damage caused by earthquakes, models akin to the double difference method to determine floods, and typhoons in five Southeast Asian countries any effect that the different natural hazards might have had (Indonesia, Myanmar, the Philippines, Thailand, and Viet- on the nightlight value. The results show little to no signifi- nam). The data are used to examine the extent to which for cance regardless of the methodology used, most likely due each type of hazard there is a difference in nightlight inten- to noise in the nightlight data and the fact that the tropics sity between affected and nonaffected cells based on (i) case have only a few days per month with no cloud cover. This paper is a product of the Poverty and Equity Global Practice. It is part of a larger effort by the World Bank to provide open access to its research and make a contribution to development policy discussions around the world. Policy Research Working Papers are also posted on the Web at http://www.worldbank.org/prwp. The authors may be contacted at [email protected]. The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. Produced by the Research Support Team Can We Rely on VIIRS Nightlights to Estimate the Short‐Term Impacts of Natural Disasters? Evidence from Five Southeast Asian Countries Emmanuel Skoufias* Eric Strobl** Thomas Tveit** JEL Classification: Q54, C63, R11, R5,O18 Keywords: Remotely Sensed Data, Natural Disasters, Damage Index, Floods, Earthquakes, Typhoons *The World Bank Group, Washington, DC USA ** University of Bern, Switzerland Introduction Natural hazards and the damages caused by them lead to headlines in the news now more than ever. Part of the reason for the increased reporting is due to the focus on climate, but it is also caused by larger economic damages than in prior years. The latter point is due to the growing global population and the increasing economic value in settled places. With this value increase comes a need for updated local data on where people live and the economic activity there. This is particularly true in the wake of a devastating natural hazard, when it can be difficult to assess damages quickly and accurately. A recent method to assess damages and economic activity is to use remotely sensed data. As a proxy for economic activity one has seen widespread use of nightlights (Henderson, Storeygard and Weil 2012) (Gillespie, et al. 2014) (Skoufias, Strobl and Tveit 2017) (Hodler and Raschky 2014) (Michalopoulos and Papaioannou 2014) (World Bank 2017). The modeling and measurement of natural hazards has also been extensively covered in the literature for different disaster types such as earthquakes (De Groeve, et al. 2008), typhoons (Emanuel 2011) and floods (Wu, Adler and Tian, et al. 2014) to name a few. The aim of this paper is to provide a refined model of a previous study (Skoufias, Strobl and Tveit 2017) where nightlights were used as a proxy for economic activity and then combined with damage indices to find the economic impact. The novelty is that a new, more spatially and temporally detailed data set for nightlights, the Visible Infrared Imaging Radiometer Suite (VIIRS) product from the National Oceanic and Atmospheric Administration (NOAA), following the work of Elvidge et al. (2017), is employed. In addition, settlement layers have been used to remove nightlight cells with zero population to reduce the impact that “empty” cells could have on the analysis. Five countries in Southeast Asia have been chosen as case studies due to their general lack of local level economic data and prevalence of different natural hazards: Indonesia, Myanmar, the Philippines, Thailand and Vietnam. These countries represent a large portion of the total GDP, population and area of the region. In addition, they experience earthquakes, typhoons and floods to a varying degree. The VIIRS data have a number of advantages over the widely used, but now discontinued, Defense Meteorological Satellite Program (DMSP). Firstly, they have a higher resolution, 450m by 450m compared to 1km by 1km for the DMSP. Furthermore, the VIIRS data are released monthly compared to the annual DMSP data, making it possible to compare month‐ on‐month effects of natural disasters. Finally, the DMSP data are normalized and capped at 63, whereas the VIIRS data have no upper limit. However, the VIIRS data exhibit a lot more noise than what is found in the DMSP data. Part of this is due to stray light corrections that can lead to negative light values for some months. Another issue, prevalent in both data sets, occurs due to the many days with cloud cover that happens in the tropics. As a matter of fact, several months have no days with a measurement. Importantly, both the DMSP and the VIIRS data have shown strong correlation with local GDP (World Bank 2017) (Henderson, Storeygard 2 and Weil 2012) and this paper will take advantage of this to use VIIRS as a proxy for economic activity. The settlement layers used in the analysis are from WorldPop (WorldPop 2013) (Worldpop 2016) and CIESIN (Facebook Connectivity Lab and Center for International Earth Science Information Network ‐ CIESIN ‐ Columbia University n.d.). Both sets are high resolution layers that show where people live through a combination of satellite images and census data. There are two reasons for including the settlement layers. Firstly, the data are used as a way to clean the VIIRS data by excluding cells that are unlikely to contain economic activity and population. The use of secondary data to improve recognition of human activity has previously been done for poverty (Jean, et al. 2016) and for urban markets (Baragwanath, et al. 2019). Secondly, the population data are used to distinguish between rural and urban areas. For the disaster modeling, we model three disaster types, earthquakes, typhoons and floods, by following closely the methodology from Skoufias, Strobl and Tveit (2017) for earthquakes and floods and Strobl (2012) for typhoons. These damage indices are then combined with the other data sets and two types of analysis are performed on this combined set. The first type is one case study for each hazard type. The choice fell on typhoon Haiyan, which hit the Philippines in 2013, the 2016 Aceh Earthquake and the 2017 floods in Southern Thailand. All three disasters caused significant local damage and were for the most part spatially and temporally separate from other disasters. The case studies consist of a simple graph showing the difference in mean nightlight values for the nightlight cells that were hit by the hazard and the cells that were not hit over a period starting 12 months before the hazard and until 12 months after. The second analysis moves the focus from specific events to a national level and hazards that occurred between June 2012 and March 2018. To find any short and medium‐term impacts that each disaster type has, a fixed effect regression with 12 monthly lags is performed. Overall, the results are not particularly significant for either analysis. Two case studies of typhoons in the Philippines exhibited the strongest results, where one found a clear drop in mean nightlight during the month that Haiyan struck and similarly a clear drop when Rammasun struck in July 2014. The 2017 floods in Thailand also exhibited a drop, but compared to noise in other months it was rather small, whereas the 2016 Aceh Earthquake exhibited no difference between cells hit by it versus those that were not affected. Part of the reason for these results could be that an influx of aid and personnel would lead to a net effect of zero, but given the noise that is exhibited overall in the VIIRS data it would be hard to draw any more confident conclusions in this regard. The issue of noise in the underlying monthly data has been well illustrated in Hu and Yao (2019), where the monthly VIIRS data showed much lower coorelation with GDP than annual VIIRS and DMSP data.1 The fixed effects regressions were also inconclusive, as there was little if any significance across disaster types and months. Several methods were tried to correct for the noise, such as dropping any negative values, setting any value below a certain threshold to zero (both for 1 The annual VIIRS data were not used in this study, as they are currently only available for 2 years 3 absolute and real values), running them only for cells with populations above a certain threshold as well as logaritmic hyberbolic sine transformations. However, the results did not improve or change. There could be several reasons for these results. The most likely being that the VIIRS data are noisy by nature and, due to the countries being close to the equator, many areas are often covered by clouds, reducing the quality of the measurements.