Despite the ubiquity of street vending in urban landscapes and its significance as a livelihood choice among the poor, it is challenging to collect comprehensive data on vendors – especially children. Based on fieldwork in Delhi, this article analyses buyer-seller interactions and transactions, to understand behaviour on both sides of this informal market. Understanding the complexities of street vending and street-connected children can serve as a crucial input into building resilient and inclusive cities.
Street vending is a familiar sight in urban landscapes worldwide, with vendors offering affordable goods at bustling traffic lights, transit stops, and markets. In India alone, street vending employs over six million individuals, accounting for over 4% of urban non-agricultural employment (Vanek et al. 2012). The share is even higher (12-24%) in Sub-Saharan Africa and Latin America (Roever 2014). A recent article in the New York Times (Hong and Ley 2023) also highlights a growing trend of migrants turning to street vending, underscoring the global significance of this economic activity as a livelihood choice among the urban poor.
In many developing countries, it is common to see children working alongside adults, adding an extra layer of socioeconomic complexity to the hustle and bustle of urban life (Alem and Laha 2016, Bhaskaran and Mehta 2011). Despite the ubiquity of street vending and its economic importance, the difficulty of tracking vendors without a permanent location, high mobility, and informality are some aspects that make it very challenging to collect comprehensive data, especially on child vendors.
The study
Motivated by this gap, I study the intricacies of buyer-seller interactions and transactions in this informal market (Jain 2024). I use a multi-faceted approach combining large-scale observational data, experimentation, and surveys, to understand behaviour on both sides of the market. I started by collecting nearly 500 hours of ‘observational data’ on around 400 vendors across Delhi's major street markets, transit stations, and traffic lights. During this, surveyors stood next to the vendors and collected real-time transaction details such as which passersby vendors targeted, the price quoted, whether a sale was made, and the characteristics of the passersby such as their gender.
As the observational data is influenced by both buyer and seller actions, to isolate and cleanly understand buyer behaviour, I designed a ‘field experiment’ where I partnered with adult and child vendors and randomised which passersby they approached to request to buy and what price they quoted. This allowed me to hold seller actions constant and I also ensured that all vendors had identical goods, scripts, and locations so that I could determine if passersby treated child and adult vendors differentially. Simultaneously, to understand vendors' pricing strategy, in a separate ‘pricing experiment’, vendors were asked to quote prices for commonly sold goods for different buyers. Finally, to learn more about buyer psychology and decision-making, I conducted a survey of over 500 passersby to collect information regarding their valuations of goods and their beliefs about street vendors. The entire study was conducted between 2021 and 2023.
Key findings
First, using the observational data, I uncovered fascinating insights about buyer-seller interactions by noting the actions and reactions of over 50,000 passersby. In particular, I realised that despite this being a competitive market with multiple sellers selling very similar goods like pens, balloons, masks, etc., transaction patterns and pricing varied significantly based on whether the seller was a child or an adult vendor and whether the customers were women, men, or a couple.
In the field experiment, despite ensuring both children and adult vendors have identical goods, scripts, and locations, I found that passersby are twice as likely to buy from a child compared to an adult vendor. Additionally, despite no differences in valuation for these goods (which I confirm through the passerby survey), couples and women are 90% and 28%, respectively, more likely to buy than men.
Figure 1. Passerby buying patterns, by passerby and seller type
Consistent with this, I observe that women and couples are also 50% more likely to be targeted by vendors than men and they are also charged higher prices on average (4-38%). Moreover, consistent with the finding that buyers are more likely to purchase from child vendors, children are almost 80% more likely to approach passersby than adult vendors (59% versus 33%).
Figure 2. Seller approach rate by child/adult vendor, by passerby categories
Explaining this pattern of two-sided discrimination
I show that these findings are consistent with a model that incorporates generosity (that is, altruism) and a (psychological) cost of refusal (or denying a request) in the buyer’s decision-making. My empirical analysis confirms that individuals exhibit greater altruism toward children than adults as they donate more money to children compared to adults working on the street (measured in the passersby survey). I also show in the field experiment that the purchasing probability doubles when passersby are approached by the vendor and requested to buy as opposed to the vendor passively standing by and not requesting the passersby to buy. Furthermore, survey data confirms that vendors target females or couples, over males, because they consider who would find it harder to refuse. Therefore, sellers, including children, consciously use inferences about buyer psychology in their targeting and pricing strategy, charging ‘emotional markups’.
Policy implications
Beyond seeing sophisticated economic thinking even in subsistence entrepreneurship, my research yields important insights for policy. Firstly, documenting and understanding the nuanced patterns of consumer emotions and vendor strategies provides an opportunity for policymakers and NGOs to understand a source of comparative advantage and pull of children in this market. Second, it is important to holistically understand their situation and perspective. The majority of street-connected children reported feeling proud to earn and safe to work on the streets as these are public spaces – crafting policies that not only acknowledge but also respect their agency could lead to more effective poverty alleviation strategies. Imposing blanket bans on children vending may risk pushing these children into more hazardous and common alternatives in this setting like begging and rag-picking (that is, trash picking and selling). As cities grapple with the challenges of urbanisation and economic inequality, understanding the complexities of street vending markets and street-connected children will be crucial in building resilient and inclusive urban environments.
A version of this article was published in collaboration with the IGC Blog.
Further Reading
- Alem, Habtamu Wandimu and Arindam Laha (2016), “Livelihood of street children and the role of social intervention: insights from literature using meta-analysis”, Child Development Research, 1: 3582101.
- Bhaskaran, R and B Mehta (2011), ‘Surviving the streets: A census of street children in Delhi’, Institute for Human Development and Save the Children.
- Roever, S (2014), ‘Informal Economy Monitoring Study Sector Report: Street Vendors’, Women in Informal Employment Globalizing and Organizing.
- Hong, N and A Ley (2023), ‘Turning to Street Vending, New Migrants Find a Competitive World’, New York Times, 4 October.
- Jain, R (2024), ‘Entrepreneurs of Emotions: Evidence from Street Vending in India’, Working Paper.
- Vanek, J, MA Chen and G Raveendran (2012), ‘A Guide to Obtaining Data on Types of Informal Workers in Official Statistics: Domestic Workers, Home-Based Workers, Street Vendors and Waste Pickers’, WIEGO Statistical Brief No. 8, Women in Informal Employment Globalizing and Organizing.
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