Published online by Cambridge University Press: 06 May 2018
Can officially reported output figures be externally validated? This paper presents a dynamic panel framework for assessing statistics using verifiable signals of economic activity. In this context, satellite readings of nitrogen dioxide, a byproduct of combustion, are forwarded. The problem of validating China's reported gross domestic product at the sub-national level during two recent downturns is considered. During the Great Recession period, reported figures are validated for some regions, but not others, including specifically those known to be inaccurate.
The Online Appendix to this paper is available at https://goo.gl/E9G5b8. Data sets are freely available at https://goo.gl/v2Dk4S and replication materials at https://goo.gl/hVrGWD. We thank Qiang Zhang at Tsinghua University for providing the data. We acknowledge funding from the Policy Design and Evaluation Lab at the School of Global Policy and Strategy, UC San Diego and thank seminar participants at Bates College, Bentley University, Bowdoin College, Middlebury College, UC San Diego, the 2014 Workshop in Macroeconomic Research at Liberal Arts Colleges at Wesleyan University, and the 2016 conference “The Environment: Issues and Strategies in China & The U.S” at UC Santa Barbara, as well as many individuals, for productive discussions. Finally, we thank the Associate Editor and two anonymous referees for useful comments. Errors are our own.