Modelling Poverty Dimensions of Urban Informal Sector Operators in a Developing Economy

Abstract

Rising poverty is a cause of concern for international, regional and local organisations and policy makers. A contributing factor is urbanisation and growth in the urban informal economy which has both beneficial and detrimental effects on the urban formal economy. This study utilises primary data from two cities and a town to examine the contribution of the urban informal sector to employment creation and poverty alleviation. The findings reveal a significant positive contribution of the informal sector towards poverty alleviation and income generation. Les organisations locales, r�gionales et internationales ainsi que les d�cideurs politiques sont inquiets face � la mont�e rapide de la pauvret�. L'expansion du secteur urbain informel qui r�sulte du processus d'urbanisation a �galement contribu� � l'accroissement de la pauvret� urbaine. La croissance de l'�conomie urbaine informelle a des cons�quences � la fois positives et n�gatives sur l'�conomie urbaine formelle. Cette �tude se base sur les donn�es primaires de deux grandes villes et d'une ville moins importante pour analyser le r�le du secteur urbain informel dans la cr�ation d'emploi et l'att�nuation de la pauvret�. Les conclusions montrent que le secteur informel contribue de fa�on importante � la r�duction de la pauvret� et � la g�n�ration de revenus.

Street Vending Phenomena: A Literature Review and Research Agenda

“…Findings are presented descriptively with some qualitative data in terms of percentages to support the analysis. Only five articles employ statistical techniques to investigate any causal relations (i.e., Agadjanian, ; Hiemstra, Van de Kooy, & Frese, ; Jaffe, Carciente, & Zanoni, ; Rajagopal, ; Reddy, ). Agadjanian () uses logistic regression analysis to test the effects of vendors’ individual characteristics on their relations with other vendors.…”

“…Hiemstra et al () also apply the regression technique to analyze the impact of planning methods on Vietnamese street vendors’ success. Reddy () utilizes a Probit model to find the relationship between poverty status and socioeconomic factors. Jaffe et al () test the correlation between credit demands and characteristics of vendors.…”

“…Street vendors are likely to be people from a marginalized sector of the society, or people who were previously employed and are engaging in street selling during an economic downturn. Those from the marginalized sector tend to have less education than the general population (Lekoko & Garegae, ; Reddy, ). Many are illiterate or do not successfully complete their basic education.…”

“…A female food vendor can attend their stalls to sell food during a peak lunchtime and take children to school in the morning and bring them back in the afternoon. In other countries, such as Mexico (Peña, ), Fiji (Reddy, ), and India (Saha, ), male vendors dominate the sector. On one hand, it is possible that street vending is viewed as inappropriate for females in Islamic countries (e.g., Al‐Muraqab, ; Tinker, ).…”

Economic and political institutions and entry into formal and informal entrepreneurship

“…A study of Anderson (1998) showed that although the estimated incidence of poverty in Ulanabaatar was 38 per cent in 1996, it could have been 53 per cent in the absence of income from the informal sector there. Similarly, Reddy found that there had been a significant increase in the incomes and assets of those involved in the informal sector compared to their pre-informal sector days in Fiji (Reddy, 2007). Thus, although informal sector entrepreneurship may be an expression of poverty, it may also mitigate the negative effects of poverty, as experienced by individuals.…”