Gross Domestic Product per capita<sup>5</sup> is our second outcome indicator. We compute this variable using GDP data from Gennaioli et al. (2015) and population data from the Gridded Population of the World (GPW) data set (CIESIN, 2016).<sup>6</sup>

# **Environmental quality – soil fertility and vegetation vigor (explanatory measures)**

We use three different measurements to proxy environmental quality. Two measure vegetation vigor, and one measures soil fertility:

- a) Net Primary Productivity (NPP), as our first measure of vegetation vigor, and

- b) the Normalized Difference Vegetation Index (NDVI), as our second measure of vegetation vigor for a robustness specification.

- c) topsoil carbon content (content of carbon in the 30cm of soil layer from the top), as a measure of soil fertility

NPP is the rate at which an ecosystem accumulates biomass. It measures how much carbon dioxide plants take in during photosynthesis minus how much carbon dioxide is released during respiration. Hence, it is an indicator for how much of the absorbed carbon becomes part of leaves, roots, stalks or tree trunks. NPP data are captured via the Moderate Resolution Imaging Spectroradiometer (MODIS) aboard NASA’s Terra and Aqua satellites. The data are provided in grid format. We use the average value per province in our computations.

NDVI is a satellite image–based measurement of environmental quality. It measures the “greenness”, i.e., the relative density and health of vegetation of the planet’s surface. This index shows where and how much green leaf vegetation was growing during a certain period. It uses red and near infrared light spectrum data captured by NASA’s Terra satellite to compute a monthly indicator of vegetation quality for about 10km2 cells. Again, we use the province averages.<sup>7</sup> Generally, it has been found that NPP is a better measure of biomass productivity and biodiversity (see for instance Xu et al., 2012; Phillips et al., 2008) which is why we use NPP for our main specifications and NDVI data in a robustness check.

Soil carbon content is an important measure of plant productivity. It is the percentage of carbon contained in the organic matter in the soil. It is the result of, e.g., decomposing plant and animal residues, root exudates or both living and dead microorganisms. Topsoil carbon content refers to the organic carbon measured in the top 30cm of the soil. It is a major determinant of plant growth and agricultural productivity (see for instance Lal, 2004). Hiederer & Kochy (2012) use the Harmonized World Soil Database (HWSD) to compute global soil organic carbon estimates on a subnational level. The Joint Research Centre

> 5 Strictly speaking, we measure GRP (Gross Regional Product) rather than GDP (Gross Domestic Product) since our unit of analysis is not the nation state required, but rather the province within a nation‐state. However, because it is more conventional to refer to such economic activity as GDP, we stick to this nomenclature.

> 6 It is noteworthy that even though GPW data are highly modeled, using for example land use and night lights data for micro‐simulated observations at the high‐resolution grid‐cell level, aggregating the data up to the aggregate admin1 level should retrieve the original data, which are solely based on survey‐ and census‐based information.

> 7 Both the NPP and NDVI data sets can be obtained via the NASA MODIS Terra website under <u>https://modis.gsfc.nasa.gov/ .</u>

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