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Entrepreneurs of the Streets: an Analytical Work on the Street Food Vendors of Dhaka City

Ahmed Taneem Muzaffar
Department of Economics, East West University, 43, Mohakhali Commercial Area, Dhaka 1212, Bangladesh

Iftekharul Huq
Department of Economics, East West University, 43, Mohakhali Commercial Area, Dhaka 1212, Bangladesh

Abstract/ Executive Summary:

Street food vending is a prevailing and distinctive part of a large informal sector in Dhaka city, the capital of Bangladesh. The paper attempts to gain insight into the business of street food vendors: highlight the problem areas and identify some key factors that positively affect their sales revenue. Using factor analysis as a tool, four major problem areas for the street food vendors have been identified. The problem areas are related to business operation, business knowledge, extortion, and product and production. Through regression analysis, it has been found that business experience, and initial capital is two key factors that positively affect sales revenue. Formal education, however, does not have any significant impact on business performance. The paper also comes to the conclusion that lack of security and problems in the supply of raw materials are two major problems as perceived by the vendors.

Keywords: Street food vendors, Informal sector, Food safety, Small business

Location: Dhaka city, the capital of Bangladesh

Start Date:

End Date:

Program Area: Food Safety and Security

Commodity: Quality

Objectives:

The specific objectives, we set forth, are to test some stylized facts about street food vending; how some key variables affect the sales revenue of the business and identify and explain the key impediments faced by the vendors.

Methodology:

There exists ample discussion on street food vending in literature although a large portion of it is concentrated on the health and hygiene feature of this group. There are also some papers that concentrate on the nutrition aspects of street food vending and its ability to provide a basic need to the urban dwellers at affordable prices. Akin to this line of thought, Acho-Chi (2002) looked into the mobile food service practice in Kumba, Cameroon, in terms of its basic characteristics, the locational factors influencing its socio-spatial distribution, the critical success factors determining customer choices, and its impacts on the local environmental resources and quality of urban life. Among those concentrating on health and hygiene, Muinde and Kuria (2005) point to the unstable and precarious of establishments of the street food vendors of Africa. They identify the lack of basic hygiene and sanitary practices both in the case of serving as well as preserving food in this sector. To that end the study emphasizes on the need for the establishment of street food centers by the city council, the training of street food vendors on hygiene, sanitation and the establishment of code of practice for the street food industry and the empowerment of Public Health Officers. Subratty, Beeharry, and Sun (2004) conducted a similar study in Mauritius and highlight the need for health education among food vendors. In order to attain the research objectives we aimed at conducting a survey to collect primary data for analysis. The survey, using the structured questionnaire, took place in 10 different locations of Dhaka city where concentration of street food vendors is relatively high in late May and June, 2008. These places include bus, railway, and launch stations, parks, busy market places and other such public spaces. We received responses from 155 vendors of which only 5 were female entrepreneurs. The respondents were asked to provide their opinion on the 14 scale items discussed above and they were processed through five point bi polar scale system. In the scale 5 and 4 indicate strongly agree and moderately agree respectively, while 3 indicates no comment, and 1 and 2 refer to strongly disagree and moderately disagree respectively. The 14 scale items were assessed for reliability using coefficient alpha. The reliability coefficient was 0.78 (Table 3) which exceeded the value of 0.70, being consistent with the recommendation of Nunnally (1978). With the collected data we primarily carried out two types of analysis using statistical software. These are factor analysis, using SPSS, to identify the key problems explaining the major impediments of doing the business and regression analysis, using EViews, to test the statements we hypothesized. The initial reliability test on the scale items ensures appropriateness of factor analysis (Cronbach’s Alpha stands at 0.78). Other assessments of the suitability of the data for factor analysis also support the condition. For instance Nunnally (1978) recommends a 10 to 1 ratio that is 10 cases for each item to be factor analyzed. Our sample size of 155 satisfies the minimum requirement of 140 cases (since there are 14 items). Two major statistical measures, generated by SPSS also support the appropriateness of factor analysis on the data. Both KMO index which is above 0.6 and Bartlett’s test of sphericity which is significant suggest the minimum value for a good factor analysis.

Source of Information: www.ccsenet.org/journal.html, Vol. 4, No. 2, February 2009

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

The street food vendors play an important role in Dhaka city. At root, it creates numerous jobs and absorbs a rising proportion of the unemployed workers. Recognition of this sector and proper assistance should significantly improve their performance in the business. Through the result of our study we identify four major areas of problems that street food vendors face today. These problem areas emerge as per the perception of street food vendors themselves. The four problem areas are relating to: (i) business operation, (ii) business knowledge, (iii) extortion related, and (iv) product and production. It was also found, that for this sector experience holds more importance than formal education. As operating the food vending business in the streets demands simple skills, the perception is that high levels of education is not necessary for better performance in the business. Such perception has been confirmed by the estimated model. Thus the sector proves to be a potential area to absorb the massive unskilled/semi skilled unemployed population. It was found that experience and initial capital significantly and positively affect sales revenue. The insignificance of formal education holds an interesting insight for policy makers when they plan for after work classes targeting the adult or employed children. In order to attract this group it is important to make formal education seem worthwhile to them. If Non Governmental Organizations (NGOs) and other institutions incorporate skill development (in relevant areas) into their curriculum, it might create an incentive for the street food vendors to avail formal education. As for the overall perceived problems of the vendors, they identify lack of security and access to raw materials as the dominant problems. These identified problem areas might enable policy makers to efficiently recognize caveats for intervention when they seek to do so.

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