Exploring the theories,determinants and policy options of street vending: A demand-side approach

Abstract

Chinese

Street vending has become an increasingly common feature of urban centres for several decades, with a relatively high proportion of developing countries’ populations depending on it for employment, income or survival. Taking a supply-side approach, studies have shown that the responses of urban planners to street vending have followed the modernism theory. In this paper, we take a demand-side (buyer-focused) approach to studying street vending, which has received little attention to date from the academic community. Employing data from Lagos state, Nigeria, we report four explanations underpinning the demand side of street vending: formal economy failures, social/redistributive explanations, financial gains and a multifeature explanation. These are, in turn, explained by the marital status, level of education and perception of individuals. Our findings highlight the need for urban planners to embrace pragmatic policies in addressing these demand-side drivers of street vending and use of urban space, rather than criminalising its actors.

Keywords

demand side determinants emerging market hawkers policy street vending theories

Introduction

Street vendors, a major sub-group within the informal economy,¹ are individuals or ‘small-business entrepreneurs, generally own-account or self-employed’, who engage in manufacturing and/or street-trading of ‘legal or socially acceptable goods and services’, particularly in mobile forms, fixed or semi-fixed stalls, public/private spaces, whether regulated or otherwise; ‘thus [flouting] either business regulation, planning codes or other legal requirements’ (Basinski, 2009; Brown et al., 2010: 667; Cross, 2000; Onodugo et al., 2016). They play important roles in the urban economy by manufacturing and/or selling essential and unique goods and services at relatively cheap prices and convenience to consumers (Martinez et al., 2017; Wongtada, 2014). In developing countries, street vending constitutes around three-quarters of small- and medium-scale enterprises (SMEs), and provides employment, income or the means of survival for a relatively high proportion of the urban population; it alleviates poverty, and it offers flexibility and autonomy to those engaged in it (Brown et al., 2010; Cross, 2000; Maneepong and Walsh, 2013; Onodugo et al., 2016; Skinner, 2008: 30). However, corresponding policies are ‘ambivalent’ (Xue and Huang, 2015: 156), ranging from support for street vendors and accommodation, through to the repression of street vendors. Specific to the latter, street vending has been criminalised in many cities, including Lagos, Nigeria – the subject of this study. Underpinning a repressive policy approach is the modernisation or urbanisation theory. Here, vendors are viewed as a nuisance, disrupting urban planning and traffic, and carrying out criminal activities in the urban centre (Crossa, 2008; Xue and Huang, 2015). Thus, accompanying policies focus mostly on deterrence, with harsh punishments for street vendors carrying out legitimate economic activities (Cross, 2000; Crossa, 2008).

In recent years, however, crackdowns on vending have started to focus on patrons. For example, in 2016, the government of Lagos state implemented a law that prosecutes both vendors and their patrons. To date, however, little is known about the motives for patronising street vendors, as few studies explore the motives for buying vended products (Culiberg and Bajde, 2014; Williams and Martinez-Perez, 2014). Specific to Nigeria, no such study exists. We contribute to the theoretical and empirical literature by employing data collected from Lagos state to investigate, first, the motives for patronising street vendors, and, thereafter, respondents’ perceptions and socioeconomic–demographic attributes relating to these motives.

The study is underpinned by the assertion that vending thrives only when there are buyers of hawked goods/services. Thus, having full information about vendors’ patrons is as important as information on street vendors. In focusing on the former, this paper undertakes a critical analysis of the three main theories on buying from street vendors: financial gains (FG), social redistribution (SR), and formal economy failures (FEF). From this we derive our research questions: What factors influence the decisions of individuals to buy goods/services from street vendors rather than a formal shop? What are the characteristics of these patrons? What is the best policy option following the evidence from this study? To answer these questions, we set up seven hypotheses based on theory and tested them in our specific context. Specifically, we employed data collected from 160 individuals in Lagos state, who have bought products from street vendors. Throughout this paper, the terms ‘vendors’ and ‘hawkers’ or ‘hawking’ and ‘vending’ are used interchangeably.

The remainder of the paper is structured as follows. Next, we present the background to the study, then we review the literature analysing the demand side of street vending. This is followed by methods, results and discussion, and conclusions.

Background to the study

The literature is replete with theories explaining street vending and the informal economy (for example, see Cross, 2000; De Soto, 1989; Hart, 1973; Huang et al., 2017; Maloney, 2004; Skinner, 2008).² Most, however, focus on the supply side. To avoid replicating these widely discussed studies, we focus attention here on the modernism theory. This addresses the repression (or criminalisation) of street vending, hence is particularly relevant to our paper. In the next section, we move on to present a critical review of demand-side theories, this paper’s primary focus.

In this paper, modernism (Scott, 1998) explains state/urban planners’ hostile response to street vending. Modernism argues that, in relation to vending, an investment-friendly urban centre with a good-looking image is prioritised; consequently, urban planners criminalise and crack down on vending because vendors are viewed as irritants who make the urban centre unattractive to investors (Bromley and Mackie, 2009; Crossa, 2008; Onodugo et al., 2016; Swanson, 2007). Cross (2000: 30) sums it up this way: ‘Modernism often implied crackdowns on street vendors because of the ideals of public order and state control.’

The modernism view underpins policy responses to street vending in many countries. Laws prohibiting street vending have been implemented in Lagos, Nigeria (Roever and Skinner, 2016). Similar laws, violent evictions and harassment of vendors have been reported in Zimbabwe, Ghana, Hong Kong, Mexico City and South Africa (Cross, 2000; Roever and Skinner, 2016; Tibaijuka, 2005). Specific to Lagos, the Street Trading and Illegal Market (Prohibition) Law (1984, 1996, 2003) prohibits and potentially criminalises street vending. Beyond confiscating vendors’ wares, the Law specifies a jail term of between six and 12 months or a fine of between 90,000 Naira (US$671.89)³ and 180,000 Naira (US$1343.78) for offenders. Street venders typically do not have money to pay these fines, thus spending up to 12 months in jail becomes the de facto penalty for vending on Lagos streets.

Further, the same law potentially criminalises buying from street vendors. Offenders are fined 90,000 Naira and/or sent to prison for six months. The Lagos state government’s justification for implementing these laws is based on the modernism argument: clearing environmental nuisance, security threats to citizens and projecting a good-looking image of the state (AFP, 2016; Lawanson and Omoegun, 2018; Xue and Huang, 2015). Clearly, in the policy makers’ view, street vending is not wanted in the Lagos ultra-modern, megacity project (Basinski, 2009; Lawanson and Omoegun, 2018) because, as a nuisance, it distorts the urban centre and violates land use acts, state laws and labour regulations (Adedeji et al., 2014; Cross, 2000; Wongtada, 2014). Consequently, street vending must be stopped/banned.

Enforcing a ban on street vending has, however, led to violent evictions of, and assaults on, vendors in Lagos. Even so, there are doubts about the success of such policies. Specifically, Cross (2000), Basinski (2009) and Crossa (2016) show that policies promoting violent evictions of street vendors are often unsuccessful. This creates a situation that can best be described as a game of hide-and-seek. Street vendors continue to operate, but cautiously, to avoid detection by law enforcement officers (they sell when the latter are out of sight but run/hide when they are visible). We were told during fieldwork that street vendors now give ‘signals’ or make telephone calls to each other to avoid capture by law enforcement officers. Thus, despite the ban, street vending has not stopped in Lagos (Basinski, 2009). We may find explanations in historical, supply, demand and socioeconomic factors. These (except demand, discussed in a later section) are discussed next, after which we present some facts about Lagos.

With a population of around 15 million people, Lagos state is the largest commercial centre in Nigeria and one of the fastest growing cities in the world (Basinski, 2009). Nigeria is the most populous country in Africa with over 185 million people, an urban-population growth rate in 2016 of 4.3%, and arguably Africa’s largest economy with GDP in 2014 of US$568.50 billion (World Bank, 2018). Lagos contributes 32% and 65% to Nigeria’s GDP and VAT receipts, respectively. There is a significant informal economy contributing to Lagos, which provides employment for about 70% of Nigerians, and ‘street vendors are the most visible manifestation’ of this (Basinski, 2009: 3).

As for the factors responsible for its importance, historically street vending in Lagos has been influenced by multiple factors: migration, fluctuating income levels, heavy vehicular traffic-congestion (which is responsible for a loss of three hours travelling time daily and which has entrenched a culture of commuting-shopping), and inadequate urban planning – all of which have become synonymous with a densely populated Lagos (AFP, 2016; Basinski, 2009; Gandy, 2006). As Nigeria’s former capital city, Lagos attracts domestic and foreign migrants but, with limited formal-sector jobs available, these migrants often turn to vending to survive (Basinski, 2009; Lawanson and Omoegun, 2018). Also important are Nigeria’s economic crises of the 1980s and the resulting structural adjustment programme (SAP), which pushed many into the informal economy, with national policy makers’ hoping to stimulate Nigeria’s growth through this means (Igudia et al., 2016; Meagher and Yunusa, 1996). However, the three tiers of government tend to pursue different, even conflicting, agendas. While local authorities grant/sell operating-rights to street vendors, the State government, through law enforcement officers, represses and arrests vendors, confiscating their wares (Basinski, 2009). The federal government, meanwhile, views the informal economy as a potential catalyst for economic growth.

On the supply side, factors such as migration, limited formal-sector job opportunities and a high population growth rate are responsible for the growth of street vending in Lagos (Hyde, 2018; Igudia et al., 2016). Additionally, the government’s inconsistent modernisation policies have led to the repeated demolition of existing markets, with former owners priced out of the new stores/markets turning to street vending (Lawanson and Omoegun, 2018; The Guardian, 2016). As such, Lagos’s street vendors, whilst heterogeneous in terms of age, gender, marital status, educational attainment and product offerings, share a common denominator in that they engage in street vending because there is no alternative (AFP, 2016; Basinski, 2009; Hyde, 2018). Thus, people with(out) formal education, adequate skills/training, unable to find formal-sector jobs or secure a permanent shop location, are left with the option of vending (selling food, non-food, drinks, groceries, mobile phones/data, books, hard-/software, shoe-shine services, etc.) for subsistence returns, to pay rent and their or their childrens’ school fees (AFP, 2016; Basinski, 2009; The Guardian, 2016).

Finally, socioeconomic and demographic factors influence participation in the informal economy, with diverse results reported in the literature. A relatively higher proportion of women, individuals with a low level of education, low skills, low wages/income, and a high level of poverty, operate in the informal economy (Becker, 2004; International Labour Organization (ILO), 1972; Schneider et al., 2001; Verick, 2006). Specifically, more women than men participate on the demand side (Sookram and Watson, 2008), buying from street vendors in the search for lower prices (Williams and Martinez-Perez, 2014). Conversely, some studies find that higher education attainment and higher wages/income lead to higher participation in the informal economy (for example, see Sookram and Watson, 2008). Although, Sookram and Watson reported these results without offering any explanation, the literature on tax and the informal economy has shown that fiscal knowledge acquired from higher levels of education leads to tax avoidance or evasion, hence increased participation in informality (Helhel and Ahmed, 2014). The literature is also inconclusive on participants’ age (Sookram and Watson, 2008), although Williams and Martinez-Perez (2014) find that younger and older people buying from vendors are motivated by lower prices and formal economy failures, respectively. Marital status influences demand-side participation (Schneider et al., 2001), but cohabiting or divorced people with children buy from street vendors because of lower prices (Williams and Martinez-Perez, 2014). Specific to Lagos, Basinski (2009) shows that street vendors are typically aged between 12 and 66 years, are at least secondary school graduates, largely women, married with children, self-employed, work long hours but earn different levels of wages.

These mixed results demonstrate that multiple factors explain street vending participation. Laws prohibiting and criminalising it are short-term, suboptimal fixes, which leave root causes unaddressed. There is thus an urgent need for more studies in this area, especially on the demand side, which has thus far received little attention to determine the full nature of those root causes.

Explaining street vending: A demand-side approach

Studies on the demand side of street vending are few, but Williams and Martinez-Perez (2014) and Culiberg and Bajde (2014) are among the exceptions. Our paper builds on both studies. We explore, apply and extend the three demand-side theories defined by Williams and Martinez-Perez (2014): the financial gains (FG), social/redistributive (SR) and formal economy failures (FEF) explanations. Also, we adapt ‘perception’ from Culiberg and Bajde (2014) and explore its role in furthering our understanding of these theories. Whereas Culiberg and Bajde studied the personal morals and perceptions of individuals about consumption tax evasion, we take a broader look by exploring the links between motives and perception. Specifically, following Sookram and Watson (2008) and Williams and Martinez-Perez (2014) we employ theories, perception and (socio)economic variables to investigate the demand side of street vending.

The FG explanation covers buying from vendors on rational grounds. Beyond the low-income population (Martinez et al., 2017) and the rich in poor neighbourhoods (Cross, 2000), FG theory argues that individuals patronise street vendors because of anticipated/calculated financial gains. They carry out a cost–benefit or ‘risk–reward’ analysis of their options, then break ‘the law [patronise vendors] when the expected penalty and probability of detection are smaller than the profits’ (Williams and Martinez-Perez, 2014: 803; Sookram and Watson, 2008). This plausibly explains the resilience of street vending in Lagos, despite laws criminalising it. Basinski (2009) shows that Lagos vendors are ready to take risks, vend and face the consequences, since they have no alternative source of livelihood. Conversely, people with dependent children buy from vendors to save money (Williams and Martinez-Perez, 2014). Further, following Martinez et al. (2017), it appears that people patronise vendors in Lagos because they are poor and earn a low income.⁴ With 87 million Nigerians (44.3% of Nigeria’s population) living in extreme poverty, weak GDP growth (0.8% in 2017), rising unemployment (highest among youths and graduates), and wages of less than US$2 a day for those in employment (NGN18,000 or US$59, monthly minimum wage)⁵ (Kharas et al., 2018; WPC, 2018), buying cheaper products from street vendors offers most Nigerians an opportunity to save.

Hypothesis (H1). The financial gain motive drives individuals to buy products from street vendors.

For its part, the SR rationale follows a post-structuralist perspective of the informal economy. It argues that individuals purchase goods/services from street vendors to build or enhance social relations and ties such as kin, pursue social and redistributive purposes (Round and Williams, 2008), resist anti-social practices (e.g. corruption) and the exploitation of workers in the neoliberal economic system (Biles, 2009; Whitson, 2007), or support environments where individuals can transform work identity or discover their true selves (Williams and Nadin, 2010). Here, ‘participants in informal markets [are seen] as social actors [and not] economic actors’ (Williams and Martinez-Perez, 2014: 803). For example, during fieldwork some participants told us they patronise street vendors out of ‘pity’; to ‘help or support’ them. SR is better understood when the culture of close family kinship of Nigerian people is considered. A popular mantra is ‘be your brother’s keeper’; literally interpreted, care for others. Buying products from kin operating as vendors can be a way of showing commitment to kinship, even beyond family to include members of the same religion, business associates and friends.

Hypothesis (H2). Social/redistributive motives drive individuals to patronise street vendors.

According to the FEF explanation, individuals patronise street vendors because of the ‘failures of the formal economy’, including delays in the provision, ‘lack of availability and reliability’, and the ‘quality’ of goods/services of formal firms (Williams and Martinez-Perez, 2014: 803; see also Biles, 2009; De Soto, 1989; Maloney, 2004). Typically, vendors make it possible for individuals to have easy and quick access to goods/services, irrespective of location and time. Specific to Lagos, FEF arises from inadequate urban planning and infrastructural development, high population density and regular traffic congestion (Basinski, 2009; Gandy, 2006). Commuters have responded to these failures by shopping in traffic as vendors are selling their wares through the windows of customers’ cars which, unlike supermarkets, is available, accessible and convenient (Basinski, 2009; Hanafi, 2018; Hyde, 2018). Thus, unlike commuters shopping online in advanced countries, commuters in Lagos do their shopping from street vendors. Further, multinational enterprises (MNEs) in Nigeria’s telecommunications (e.g. MTN) and food and beverages industries (e.g. UAC foods) have modelled their business around vending, as their products are mostly sold on the street (Neuwirth, 2011; The Guardian, 2016).

Hypothesis (H3). The unavailability of products in the formal market, and/or the faster or better-quality service of the informal economy, drive individuals to buy from street vendors.

In a study of the determinants of the informal economy, Sookram and Watson (2008) report the strong influence of perception. Similarly, in applying and extending ‘Jones’s issue contingent model’, Culiberg and Bajde (2014) report the strong influence of ‘moral philosophy and perception’, and that perception influences moral judgement and intentions. Trivedi et al., (2003) observe that the moral reasoning, value orientation, and social and political environments of individuals influence their perceptions. We accept these narratives and argue that respondents have formed perceptions based on their moral reasoning, orientation and experiences regarding Lagos’s street vendors/vending and government policy. This justifies our decision to investigate how their perception relates to their motives for patronising vendors.

Hypotheses (H4–7): The stronger the perception that:

H4: ‘hawkers are poor, disadvantaged’, the higher the incentive to patronise on SR grounds;

H4b. ‘hawking is helpful to hawkers’, the higher the incentive to patronise street vendors;

H5. ‘hawkers pay no tax’, the higher the incentive to patronise them on FG grounds;

H6. ‘hawkers pay multiple fees’, the higher the incentive to patronise them on FEF/SR grounds;

H7. ‘Government overregulates, disturbs hawkers’, the stronger the incentive to patronise street vendors.

Methods

We employ data collected in a two-stage process between May and August 2017 from vendors’ patrons in Lagos, Nigeria. In addition to gaining empirical support (Arimah, 2011; Reddy et al., 2003; Williams and Round, 2009), our sampling methods are the best practicable option for this study. First, they ensure the data collected cover a wide range of geographical areas and are representative of the true population, considering the huge cost and time required to cover the entire population. Second, considering the spate of kidnappings in Nigeria at the time, it was a realistic and practical way of gaining respondents’ trust in collecting the required information. Third, avoiding a house-to-house survey gave respondents additional comfort and reduced any suspicion that they could be traceable (also see endnotes 7, 11).

In stage one, we employed a ‘street-by-street survey’ (Reddy et al., 2003: 137), with a spatial random sampling method (Williams and Round, 2009). The former involves administering a survey instrument to members of the public who cooperate, whilst the latter involves selecting every alternate location and participant for sampling (see Igudia et al., 2016). Thus, we went to business premises/workshops, public places and bus terminals to select every alternate adult who was willing to complete our questionnaire. Where an individual declined, the next person was sampled and the one after was skipped. We listed in alphabetical order the ‘ten (10) most well-established street vending locations in Lagos state’ (Anetor, 2015: 36).⁶ Then, we selected randomly for the survey the following five, starting with the second, then every alternate location: Ajah, Iyana-Ipaya, Mile2, Orile and Yaba. We administered 120 questionnaires at each location, generating 600 completed responses. However, not all were usable.

In stage two, we employed other criteria to select from the 600 responses. This involved a purposeful selection, where only participants who answered yes to the question ‘have you ever bought a good or service from a street hawker’ were selected (Williams and Martinez-Perez, 2014, employed a similar question in their study). This yielded a total of 160 (out of 600) relevant responses, used in this study. The extra step was taken to ensure the information used in the study is from respondents who have bought from street vendors, in line with the aim of this study.

To help administer the questionnaire, three indigenous assistants, who had recently completed their secondary school education and who spoke the native Yoruba language, were recruited and trained. Training the administrators to avoid leading answers was part of our efforts to reduce interviewer bias. To check their understanding of the process, they administered an early version of the questionnaire to 30 people. Feedback from the pilot study influenced the design of the final questionnaire. For example, we changed some words in the survey instrument: ‘vendor/(ing)’ to ‘hawker/(ing)’. Further, employing administrators improved the quality and quantity of data we were able to gather, as the assistants helped to debunk suspicion about the survey.⁷

We collected information on respondents’ age, gender, education, marital status, income, employments/business-enterprises, participation in street vending, perception and reasons for buying from street vendors (but we did not include a question on why they sell; this has been addressed in the literature). To ensure response consistency and mitigate problems associated with surveying the informal economy, some questions were repeated, but worded differently. To reduce biases associated with collected opinions, both open and closed questions were employed (see Huang et al., 2017; Iyenda, 2005).⁸ For example, we asked ‘why did you patronise street hawkers?’ without offering any suggestion of possible reasons.⁹ Interestingly, responses to this question extend the literature, because cited motives for patronising street vendors in Nigeria were not only consistent with literature-defined theories (FEF, FG and SR), but also a new, fourth explanation emerged. We term this the multifeature motive.¹⁰

Finally, we employ multinomial logistic regression to determine the attributes of these four explanations. Multinomial logistic regression is appropriate for analysing data employed in this study; specifically, a nominal dependent variable, with multiple categorical and ordinal explanatory variables (Sookram and Watson, 2008; Williams and Martinez, 2014). The key question we seek to answer is, what factors, attributes or characteristics relate to motives for buying from street vendors? Our hypotheses, formulated to answer the question, are based on existing theory and literature: H1–H3 follow Williams and Martinez-Perez (2014); H4–H7 follow Sookram and Watson (2008) and the evidence from the wider literature on factors influencing vending patronage. Finally, we test for internal consistency and the reliability of the variables survey instrument and achieve an acceptable Cronbach alpha coefficient of over 0.7 (Table 1).

Table 1.

Reliability analysis.

		Number of variables	Cronbach α
1	Reliability test for dichotomous variables	10	0.858
2	Reliability test for Likert-scale variables	10	0.712

Results and analysis

Cronbach’s reliability test results are presented in Table 1 (for full-detailed results, see the extended appendix, available online). Following Field’s (2005) suggestions, a Cronbach’s alpha of 0.7 or more (as reported here: 0.712 and 0.858) is acceptable. We are therefore confident that the variables used in this study are consistent and reliable.

In Table 2 we present the demographics of respondents and some important descriptive statistics. With 51.2% and 48.8% for men and women, respectively, both genders are reasonably represented in this study. Although the highest proportion of participants is aged 26–30, respondents were drawn across all ages of the active labour force in Nigeria. Participants are relatively educated, with the highest proportion (40.6%) having secondary school education (SSE), although 12.5% of participants have no formal education at all.

Table 2.

Respondents’ demographics and some important descriptive statistics.

Item	% of total (N = 160)
Gender:
Male	51.3
Female	48.8
Age:
16–25	14.4
26–30	37.5
31–35	19.4
36–40	13.8
41–64	15.0
Mean: 32; Std deviation: 7.5; Mode, Median: 30
Education:
None (no formal education)	12.5
SSE (Senior School Education)	40.6
HND/OND /NCE^a	25.6
BSc/Degree	21.3
Employment status:
Employed + run own-business	13.2
Private/government employee	18.2
Fully self-employed	49.7
Don’t know	18.9
Main job/business activity:
Home/pure service	41.3
Sales/trader	36.4
Professionals	22.4
Involved in supply-side street hawking by main job/business activity:
Home/pure service	74.1
Sales/trader	76.9
Professionals	34.4

Note: ^aHND: Higher National Diploma; OND: Ordinary National Diploma; NCE: National Certificate in Education; N: total responses.

About half (49.4%) of respondents are self-employed. The rest either own/run a business alongside their main employment (13.2%) or are in full-time employment (18.1%). The highest proportion (41.3%) of respondents carry out home services (gateman, laundry, plumber, electrician) or pure services (mechanic, hair dressing, tailoring, repairs). Next is the proportion of respondents who trade (36.4%). Comparing genders, the highest proportion (33.3%) of female respondents engage in petty/kiosk trade, followed by home/pure service (29.5%), then professionals (19.5%). For male participants, the highest proportion (43.9%) provide home/pure services, followed by trade (31.7%), then professionals (20.7%). Further, about three-quarters of respondents whose main jobs/businesses are home/pure services provision (74.1%) and sales/trading (76.9%) have been involved in the supply side of hawking, in contrast with one-third of professionals (34.4%) who have been involved as vendors.

Reasons for patronising street hawkers in Nigeria: A demand-side approach

Responses to the following open-ended question are depicted in Table 3: Why did you patronise street hawkers? (This gains empirical support from Huang et al., 2017). With just over one-half (53.3%) of respondents patronising street vendors because they provide accessible, fast and reliable goods/services, the FEF explanation is clearly the strongest rationale for patronising street vendors in Lagos, Nigeria. This is followed by the FG rationale, with just above one-tenth (12.5%) of respondents; split between ‘cheaper than their cost in shop’ (10.5%) and ‘save on expenses, reduce cost’ (2%). Finally, with around one-tenth (9.8%) of respondents (split between ‘networking’ (2.6%) and ‘help hawkers’ (7.2%)), the SR rationale is confirmed as the third main motive for patronising vendors in Lagos. These results confirm Hypotheses 1–3.

Table 3.

Respondents’ reasons for patronising street vendors in Nigeria.

Motive:	% of total
Social redistributive rationale (help hawkers, networking/win customers)	9.9
Financial gains (cheaper/better than shop, save expenses/less cost)	12.5
Multifeature (only job known/survival, get quick/reliable money/income, easy sales)	24.3
Formal economy (accessible, reliable, save time)	53.3

Note: total responses (N): 160; respondents’ cited words in parentheses.

However, a unique, fourth motive for patronising street vendors emerged from the results. We call it the multifeature motive, with 24.3% of respondents patronising vendors ‘to make easy income or sales’ (13.8%) and ‘to reduce stress, survive or do the only job known’ (10.5%) (Table 3). With the multifeature motive, respondents patronise street vendors for two reasons: to buy and to sell. They buy from street vendors to build a network of customers, which they in turn ‘make quick sales [to, in order to] reduce stress and survive in the only job/business I know’ (respondents’ words). Further, multifeature leverages on the three main motives to build its unique identity: individuals want FG because patronising street vendors provides them with the platform to get quick and reliable money/income; they build a network of people (SR), who in turn become a stream of customers to whom they make quick sales; and they patronise street vendors because there are FEF, which they want to avoid, as this ‘creates lot of stress’ (respondents’ words) for them. Thus, multifeature participants reduce the survival-related stress created by FEF, by participating in both the supply and the demand side of vending. Further, multifeature participants suggest that the informal economy/street vending is self-sustaining.

Finally, the multifeature rationale is different from the three main explanations (FEF, FG and SR) because of the core intentions of individuals in this category: ultimately to sell, having started by buying from existing vendors. As depicted in Table 3, the words used by respondents categorised as multifeature relate to the supply side, whilst words describing the three main theories relate to the demand side, of street vending. For example, FEF respondents use such words as ‘accessible’, ‘reliable’, ‘save time’, whilst such words as ‘quick money’, ‘reliable money’, ‘easy sales’ were used for multifeature. Similarly, FG involves words such as ‘cheaper’, ‘better than shop’, ‘save expenses’, ‘less costly’, whilst multifeature uses ‘reduce stress’, ‘survival’, ‘only job known’.

Attributes explaining the demand-side theories of street vending

The results in Table 4 show that four perception and two demographic/socioeconomic variables are statistically important. Two perception variables, ‘hawkers are poor/disadvantaged’ and ‘hawking is helpful to hawkers’, measure perceptions of street vendors/vending, whilst the other two, ‘hawkers pay multiple fees’ and ‘hawkers pay no tax’, measure perceptions of urban policy and tax, respectively. Marital status and education level are the relevant demographic/socioeconomic variables, implying gender and age are statistically non-significant.¹¹ So, too, is the variable ‘government overregulates, disturbs hawkers’, implying that regulatory burden, a key determinant of supply-side and dual (supply and demand) participation in the street vending/informal economy (De Soto, 1989; Maloney, 2004; Sookram and Watson, 2008) is not a relevant determinant of demand-side participation. This is consistent with the findings of Sookram and Watson (2008: 1541) that ‘excessive government regulation’ does not ‘encourage participation’ on the demand side of the informal economy, but it does encourage ‘dual participation’.

Table 4.

Multinomial logistic model results: motives of street vending and attributes.

Attributes	Rationale	Coefficient at different reference categories
Attributes	Rationale	SR	FG	MF	FEF
Gender: Female	SR	0	49.86(0.995)	50.7(0.99)	50(0.993)
	FG	−49.86(0.99)	0	0.8(0.42)	−39(0.996)
	MF	−50.7(0.99)	−0.84(0.42)	0	−0.14(0.87)
	FEF	−50.6(0.99)	−0.7(0.49)	0.14(0.87)	0
Marital status: Married	SR	0	−38.1(0.995)	−36.2(0.995)	−35(0.995)
	FG	38.1(0.995)	0	1.85(0.062)	2.63(0.013)
	MF	36.2(0.995)	−1.85(0.062)	0	0.77(0.37)
	FEF	35.4(0.995)	−2.63(0.013)	−0.77(0.37)	0
Education level: SSE & below	SR	0	16.94(0.995)	35.1(0.99)	36(0.99)
	FG	−16.9(0.998)	0	18.2(0.998)	19.6(0.998)
	MF	−18.7(0.000)^a	−16.8(0.000)^a	0	1.43(0.36)
	FEF	−36.6(0.99)	−19.6(0.000)	−1.4(0.36)	0
Hawkers are poor, disadvantaged: (Disagreed)	SR	0	−34.9(0.99)	−33.7(0.99)	−36(0.99)
	FG	34.94(0.99)	0	1.2(0.36)	−1.68(0.198)
	MF	33.7(0.99)	−1.21(0.36)	0	−2.89(0.011)
	FEF	36.6(0.99)	1.68(0.198)	2.89(0.011)	0
Hawking helpful to hawkers: (Disagreed)	SR	0	18.3(0.995)	15.9(0.996)	19(0.995)
	FG	−18.35(0.995)	0	−2.4(0.054)	0.74(0.56)
	MF	−15.9(0.996)	2.4(0.054)	0	3.14(0.004)
	FEF	−19.1(0.995)	−0.74(0.56)	−3.14(0.004)	0
Hawkers pay no tax: (Disagreed)	SR	0	−20.1(0.000)	−0.5(0.79)	0.5(0.79)
	FG	20.1[0.000]	0	19.6[0.000]	20.6[0.000]
	MF	0.54(0.79)	−19.59(0.000)	0	1.04(0.26)
	FEF	−0.5(0.79)	−20.6[0.000]	−1.04(0.257)	0
Hawkers pay multiple fees: (Disagreed)	SR	0	20.5(0.998)	2.57(0.28)	−0.68(0.72)
	FG	−20.5(0.998)	0	−17.9(0.998)	−21.2(0.998)
	MF	−2.57(0.28)	17.94(0.998)	0	−3.25(0.026)
	FEF	0.068(0.72)	21.2(0.998)	3.25(0.026)	0
Government overregulates, disturbs hawkers: (Disagreed)	SR	0	65.2(0.996)	70.5(0.995)	50(0.99)
	FG	−65.2[0.000]	0	5.3[0.000]	−15.3[0.000]
	MF	−70.1[0.000]	−5.31[0.005]	0	−20.6[0.000]
	FEF	−49.87(0.99)	15.3(0.999)	20.59(0.998)	0
Likelihood ratio		75.8***
Chi-square		114.49***
Pseudo R-square (Nalkerke)		0.8

Notes: ***, **, and * means 1%, 5%, and 10% levels of significance, respectively; p-values in parentheses; standard errors in square brackets; ^aeduclevel(1); SSE: secondary school education; SR: social redistributive; FG: financial gains, MF: multifeature; FEF: formal economy failures.

With both the Likelihood ratio (75.8) and Chi-square (114.49) significant at the 1% level, and a pseudo-R² of 0.80, these six variables capture 80% of the factors explaining respondents’ motives for patronising street vendors in Nigeria. The sign of an attribute demonstrates how it explains a theory/motive, relative to the referenced theory/motive. Where positive (negative), the compared theory is more (less) likely than the referenced theory to be plausible. Next, we undertake a detailed presentation of results in Table 4.

Formal economy failures (FEF): relative to singles, married people are less likely to buy products from vendors for FEF than for the FG motive. Compared with those with a degree, individuals with the lowest levels of educational attainment (SSE and below) are less likely to buy from vendors for FEF than for the FG motive. Individuals who disagreed with the statements ‘hawkers are poor and disadvantaged’ and ‘hawkers pay multiple fees’ are more likely to buy from vendors for FEF than for the multifeature motive. Conversely, individuals who disagreed with the statement, ‘hawking is helpful to hawkers’ are less likely to buy from street vendors for FEF than for the multifeature motive.

Social redistributive rationale (SR): individuals with an intermediate level of education (above SSE but below BSc/degree) are less likely to buy products from street vendors for multifeature rather than SR reasons. Also, individuals who disagreed with the statement, ‘hawkers pay no tax’ are less likely to buy from vendors for SR than for the FG motive.

Financial gains explanation (FG): relative to singles, married people are more likely to buy products from street vendors for FG than for multifeature and FEF motives. Relative to those with a BSc/degree, individuals with the lowest levels of educational attainment (SSE and below) and intermediate-level educational attainment are, respectively, less likely to buy from vendors for FEF and multifeature motives than for the FG motive. Individuals who disagreed with the statement ‘hawking is helpful to street hawkers’ are less likely to patronise vendors for FG than for the multifeature motive. Those who disagreed with the statement ‘hawkers pay no tax’ are less likely to buy from vendors for SR and multifeature motives than for the FG motive.

Multifeature explanation (MF): relative to singles, married people are less likely to buy products from street vendors on the basis of multifeature than the FG motive. Relative to the highest educational levels, individuals with intermediate-level educational attainment are less likely to buy from vendors for multifeature than for SR and FG motives. Individuals who disagreed with the statements ‘hawkers are poor and disadvantaged’ and ‘hawkers pay multiple fees’ are less likely to buy from vendors for multifeature than for FEF motives. Conversely, individuals who disagreed with the statement, ‘hawking is helpful to hawkers’ are more likely to buy from vendors for multifeature than for FG and FEF motives.

Finally, we present in Table 5 a summary of the unique attributes of these motives. One may view the multifeature motive as a reflection of the other three motives since it leverages on them. However, as discussed above, results in Table 5 clearly show that multifeature has a unique identity.

Table 5.

Difference between the rationale of street vending and the vendors’ attributes.

	Formal economy	Social redistributive	Financial gains	Multifeature
Marital status	Single	n.s.	Married	Single
Education level	Top-level	Mid-level	Lowest level/none	Top-level
Perception 1: SH do not pay tax	Agreed	Agreed	n.s.	Agreed
Perception 2: SH pay multiple fees	Disagreed	n.s.	Agreed	Agreed
Perception 3: SH are poor, disadvantaged	Disagreed	n.s.	n.s.	Agreed
Perception 4: SHng helps vendors to escape poverty	Agreed	n.s.	Agreed	Agreed

Notes: SH: street vendors; SHng: street hawking; n.s.: statistically non-significant.

Further discussion

Individuals who cite FEF as a motive for buying goods/services from street vendors are likely to be single and highly educated. The government’s failure to plan for and to solve traffic-congestion problems (FEF) causes young professionals to patronise street vendors since vendors are available and accessible. For example, to avoid late arrival at work, young professionals leave for work at least two hours early and, since they work Mondays to Fridays, they do not have time to shop at supermarkets. Thus, they patronise street vendors for their daily food (e.g. snacks, drinks) and non-food (e.g. mobile phones/data, hard-/software) needs, as their only option (AFP, 2016; Hanafi, 2018). This relationship is confirmed by their perception that, although street vendors are poor/disadvantaged and/or pay multiple fees, vending helps vendors escape poverty.¹²

Individuals who cite SR as a motive for buying from vendors are likely to have attained mid-level education and are plausibly of the opinion that vendors pay tax. Contrasting Culiberg and Bajde (2014), people who buy for SR motives do not patronise street vendors in Lagos to avoid/evade tax, but to build kinship. To speculate, the culture of ‘be your brother’s keeper’ is strong in Nigeria. So, it is common practice for family members and religious/business associates to buy products from a vendor-member to show loyalty and maintain kinship, rather than to buy from outsiders/formal shops.

Individuals who cite FG as a motive for buying from street vendors are likely to be married and to have the lowest levels of formal education. Results confirm the findings of Williams and Martinez-Perez (2014) that people with dependants buy from street vendors for the lower price (FG) motive (Basinski, 2009, reports similar results for married women). Results also support Meagher and Yunusa’s (1996) observation that working-class income affects the demand side of Nigeria’s informal economy and Martinez et al.’s (2017) argument that people patronise vendors because they are poor and earn a low income, as the low level of educational attainment suggests those who patronise vendors for the FG motive are unlikely to have attained high-paying formal sector jobs – hence they earn low wages (Verick, 2006). With 44.3% of Nigerians living in extreme poverty (WPC, 2018), respondents perceive that vending provides a poverty escape route, although vendors are burdened with multiple fees. Thus, for married women, buying from street vendors represents an opportunity to save, and thus escape from poverty.

Individuals who participate in the demand side of street vending for multifeature reasons are likely to be single and highly educated. As noted earlier, these individuals have dual objectives for patronising vendors: to buy and to sell. This is confirmed by their perception that vendors are poor/disadvantaged, pay multiple fees, but that vending enables them to escape poverty, as they do not pay tax.¹³ These individuals can be MNE representatives who patronise street vendors to make them distributors (Neuwirth, 2011), or traders in their own right, who in the process of going about their business find the need to buy food/water or other items from vendors. We reiterate our earlier thesis that multifeature participants suggest street vending is self-sustaining.

Conclusions

This study extends the street-vending literature by reporting four motives for which individuals engage on the demand-side of street vending: FEF, SR, FG and multifeature rationales. FEF (formal economy failures) is the main motive for patronising street vendors in Nigeria (over one-half, 53.3%, of respondents). This contrasts with Williams and Martinez-Perez’s (2014) findings that seeking lower prices (FG: financial gains) is the highest-ranked single motive for buying from vendors; however, it does support their argument of a significant country/regional variation in the main motive for patronising vendors. For Lagos, our findings call into question the ban on or criminalisation of street vending, since policy makers are largely responsible for the main trigger, FEF. As explained earlier, the government’s failure to address traffic congestion on Lagos’s roads and consequent loss of daily travelling time (FEF) underpins individuals/young professionals’ patronage of vendors in Lagos.

Also reported are six variables relating to these motives: marital status, level of education and four perception variables. Married individuals with low levels of formal education attainment will likely patronise street vendors for FG reasons (lower price/to save), whilst single, highly educated individuals will likely patronise vendors for FEF reasons (accessible, available, convenient) and multifeature reasons (buy and sell). However, significant differences exist in the perception of individuals patronising street vendors for FG and multifeature motives, as explained earlier and confirmed by the results in Table 5. These results confirm Sookram and Watson’s (2008) findings that married people participate in the informal economy’s demand side, but they contrast with Williams and Martinez-Perez’s (2014) findings that younger and older people buying from street vendors are motivated by lower prices and FEF, respectively. Descriptive analysis shows differences in respondents’ gender and main job/occupation type but, in support of Asiedu and Agyei-Mensah (2008), they are statistically non-significant. However, it contrasts with the findings of Williams and Martinez-Perez (2014) and Sookram and Watson (2008), who reported significant differences between men and women participating in the demand side of the informal economy.

The multiple factors reported in this study highlight the need for pragmatic policies to tackle street vending in Lagos, Nigeria. Such a one-size-fits-all and extreme policy as banning/criminalising vending represents a suboptimal and unstable equilibrium. Therefore, as has been recommended elsewhere (Asiedu and Agyei-Mensah 2008; Basinski, 2009; Cross 2000), policy makers should ‘consult’ with, rather than ‘confront’, street vendors, accommodating and allowing them to co-exist with the formal sector. One way of doing this is to ensure an honest, open and continuous dialogue between policy makers, street vendors and their patrons. This is supported by our findings that over one-half of patrons have cited FEF as their main motive.

Finally, policy makers should facilitate an environment that encourages all citizens to achieve their full economic potential, and not criminalise those going about their legitimate business. This can be achieved by ensuring policy consistency, redefining or reclassifying what they recognise as ‘informal activity’ (Xue and Huang, 2015), by deregulating the sector to allow informal economy/street vending to exist as an ‘incubator’ for business start-ups (Cross, 2000) or by creating a vending drive-through market. However policy makers approach this challenge, individuals participating in both the demand and supply side of vending should have the resources and opportunities to achieve their full economic potential.

To conclude, we hope this article stimulates further research, as we cannot claim it provides answers to all possible questions relating to the demand side of street vending. To enhance generalisation, future studies may employ larger samples to reflect the population of Lagos state and Nigeria. Findings reported in this study were based on 160 responses, although this figure compares well with those used in the literature.¹⁴ Moreover, efforts were made to achieve high quantity/quality samples.¹⁵ In addition, further studies into what social ties mean and how they relate to vending would be helpful. Finally, whilst we have tried to reduce bias,¹⁶ we accept that it cannot fully be eliminated. We may thus have omitted from this study a proportion of street vending patrons with uncaptured diverse motives. Nevertheless, to conclude, we restate this paper’s contributions: it reports four motives for participating on the demand side of street vending, including a new multifeature motive, which are, in turn, explained by the marital status, level of education and perceptions of street vending of individuals. Findings highlight the need for urban planners to embrace pragmatic policies in addressing these demand-side drivers of street vending and use of the urban space, rather than criminalising its actors.

Footnotes

Appendix

Table A1 shows results of the factors that further explain motives for street vending, with Agreed being the dummy, whilst Disagreed is redundant for perception variables.

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Notes

ORCID iD

Eghosa O Igudia

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