DP11686 Can Black Gold Shine? The Effect of Oil Prices on Nighttime Light in Brazil

Author(s): Mark Gradstein, Marc Klemp
Publication Date: December 2016
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Programme Areas: Development Economics, Macroeconomics and Growth
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=11686

We explore the existence of a local "resource curse"? related to Brazi's oil reserves. To this end, we examine the effect of changes in international oil prices interacted with measures of oil access on nighttime light - a measure of economic activity - across the country's localities. We detect no evidence of a resource curse: in fact, better access to oil enhances the positive effect of oil prices on economic activity. Our estimates indicate that a doubling of oil prices causes an average increase in luminosity of some 50 percent more in oil rich than in oil poor states; and 30 percent more, on average, in localities within 100 km dis-tance to the nearest oil field relative to more remote localities.