We compare annual changes (log differenced) in total provincial GVA with changes in nighttime lights (NTL) across sectors. We employ province fixed effects, which means we not only remove unobserved time-invariant differences by log-differencing, but also adjust for different province-level trends. A 1 percent increase in NTL is associated with a 0.08 percent increase in real GDP. When disaggregated by sector, as may be expected, the physical subsectors (construction and manufacturing) drive this relationship.

In Panel B we report results that adjust for differences across years by including year fixed effects as in equation 4 below. = Δ pp pp pp tt tt yyppyypp pp tt This means that we remove the average effect of aggregate (country-wide) business cycles. ΔΔOO ΔΔLL + II + μμ + εε Idiosyncratic changes in construction and manufacturing are still associated with changes in NTL, but the coefficients for the other sectors are no longer significant. In panel C, we report results using changes in NTL from grid cells that are contained in urban districts, within the urban provinces. Urban districts are defined to be those that contain urban agglomeration grid cells. Overall, we view urban districts as containing a core (comprising the urban grid cells) and a periphery, other grid cells in the district. There is an increase in the magnitudes of the construction and manufacturing coefficients, as well as the associated t-statistics, when restricting the NTL averages to urban districts.

Finally, in panel D, we compute changes in the NTL averages based exclusively on the urban grid cells in each province. The results show a large increase in the magnitudes of both coefficients, although for manufacturing, the standard error is higher (and the t-statistic falls to below a significant threshold). For construction, however, limiting the NTL averages to just the urban grid cells results in a sharper signal. A 1 percent increase in NTL is associated with a 0.26 percent increase in construction GVA, controlling for time-invariant unobserved province level effects, province trends, and year effects.<sup>19</sup> Together, Table 4 provides evidence in support of the idea that changes in nighttime light luminosity are useful signals of changes in economic activity across most sectors (panel A). Further, panels B-D show that even after controlling for aggregate effects (such as those associated with business cycles), nighttime light changes are associated with changes in real construction and manufacturing gross-value added. This in turn suggests that changes in nighttime lights capture economically meaningful changes within and across urban economies.<sup>20</sup> 19 We control for the different sensor (DMSP or VIIRS) average effects with the year effect because our data is annual, and we use DMSP until 2012 and VIIRS thereafter. We exclude 2013 from the analysis because we do not want to combine the DMSP and VIIRS measures.

20 In Appendix Table A6, we report results using placebo variables for changes in NTL that correspond to Panels A and C in Table 4. Table A6 shows that NTL changes from the previous year or the following year have coefficients that are close to zero and not statistically significant.

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