The Informal City: Exploring the Variety of the Street Vending Economy

Abstract

Street vending is one of the most important economic activities of the informal sector. This paper highlights the diversity of street vending. We extend the previous analysis of the informal economy in one city, Cali, Colombia, with data on informal workers in two public spaces: Downtown and Santa Helena, and workers in the mass transit bus system. We show how the informal economy varies greatly within one city. Provided the lack of data in the study of the informal economy, most studies describe the dynamics of the informal sector as uniform across the urban space. In this analysis, we present evidence about the spatial segmentation and diversity of street vendors by their socioeconomic conditions, profits, and earnings. We further explore the spatial segmentation by analyzing the large indebtedness and financial exclusion of street vendors. We report that workers in the mass transit system are the most vulnerable and indebted and how the large indebtedness to illegal payday lenders is a major barrier for street vendors to move out of poverty. We conclude that it is important to understand the granularity of the urban informal economy in order to craft suitable public policies.