Measuring Local Economic Activity Using Pedestrian Count Data*

Abstract

Measures of timely local economic activity are elusive. In this study, we explore the extent to which the volume of pedestrians in a central business district may be associated with its economic activity. Both logically and theoretically there is a strong rationale to expect such a relationship. We find that this is supported empirically also. We also briefly consider the extent to which this observed association may be applied to other use cases.

Place‐Based Policies and Nowcasting

“…Therefore, the challenge for nowcasters is what unconventional measures are the most suitable for gauging present, near future and recent past economic activity. One method to corroborate the relationship between unconventional data sources may be to model relationships (Navon and de Silva 2023) at spatially aggregated levels. Spatially aggregated relationships, however, may not necessarily hold at local levels, for example, pedestrian counts may be a useful indicator of economic activity for large CBDs but not within farming areas.…”

“…Consider, for example, the city of Melbourne which provides pedestrian counts in real time of various sensors throughout its business district. The data can infer (to a degree) economic activity (Navon and de Silva 2023); however, its primary stated intent is to capture the city's vitality and vibrancy and thus it is more of a community activity measure 4. Google Trends (Choi and Varian 2012) is another example, as is satellite data (Henderson, Storeygard and Weil 2012).…”