Satellite night lights and Google searches improve state growth estimates by up to 62%
A new RBI study shows that combining night-time satellite imagery with Google Trends data can cut errors in quarterly state-level growth estimates by as much as 62% in three Indian states.
The Reserve Bank of India released a study that creates a quarterly nowcasting framework for tracking economic activity in Gujarat, Maharashtra and Karnataka. By merging night-time satellite light measurements with Google Trends indices covering jobs, education, finance, shopping, real estate and automobiles, the model narrows the error margin of state-level growth estimates by up to 62 percent. Night-light intensity showed a strong year-on-year correlation with Gross State Value Added, highest in Maharashtra (0.90), followed by Karnataka (0.79) and Gujarat (0.66), even after removing pandemic-affected quarters.
While Google Trends contributed mainly to same-period insights, the satellite data also offered predictive power for subsequent quarters. The researchers caution that the framework has only been tested in three industrialised states and should complement, not replace, official data releases that lag 12-18 months.
Why it matters
More timely economic indicators help policymakers and investors respond faster to regional growth trends.
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