BAHIR DAR UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT
MASTER OF BUSINESS ADMINISTRATION (MBA)

THE EFFECT OF STREET VENDING ON LOCAL GOVERNMENT

REVENUE: THE CASE OF BAHIR DAR CITY, ETHIOPIA

BY:
YEBELTAL TAKELE

JANUARY: 2021
BAHIR DAR, ETHIOPIA

i
 BAHIR DAR UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF MANAGEMENT
MASTER OF BUSINESS ADMINISTRATION (MBA)

The effect of street vending on Local government revenue in case of

Bahir Dar City

A Thesis submitted to College of Business and Economics, Bahir Dar

University in partial fulfillment of the requirements for the Degree of Master
of Business Administration (MBA).

By:
Yebeltal Takele

Advisor: Alebachew Asfaw (PhD)

January 2021
Bahir Dar, Ethiopia

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 Declaration
This is to certify that the thesis entitled “ the effect of street vending on local governance
revenue in case of Bahir Dar City, Ethiopia ”, submitted in partial fulfillment of the requirements
for the degree of Masters of Business Administrations (MBA), Department of Management, in
College of Business and Economics (CoBE), Bahir Dar University, is a record of original work
carried out by me and has never been submitted to this or any other institution to get any other
degree or certificates. The assistance and help I received during the course of this investigation
have been received during the course of this investigation have been duly acknowledged.

__________________________________ ________________ _______________________

Name of the candidate Date Place

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 BAHIR DAR UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF MANAGEMENT
MASTER OF BUSINESS ADMINISTRATION (MBA)

Approval of thesis for defense

I hereby certify that I have supervised, read, and evaluated this thesis/dissertation titled “The
effect of street vending on Local government revenue in case of Bahir Dar City” by Yebeltal
Takele prepared under my guidance. I recommend the thesis be submitted for oral defense.

_____________________ ________________ _____________

Advisor’s name Signature Date

ii
 BAHIR DAR UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF MANAGEMENT
MASTER OF BUSINESS ADMINISTRATION (MBA)

Approval of thesis for defense result

We hereby certify that we have examined this dissertation/thesis entitled “The effect of street
vending on Local government revenue in case of Bahir Dar City” by Yebeltal Takele. I
recommend that ___________________ is approved for the degree of “master of business
administration”

Board of Examiners
_____________________ ________________ _____________
External examiner’s name Signature Date
_____________________ ________________ _____________
Internal examiner’s name Signature Date
_____________________ ________________ _____________
Chair person’s name Signature Date

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 Acknowledgment
First of all, I would like to express my deepest gratitude for Lord God for allowing me to
accomplish this thesis. Next, I would like to express my deepest gratitude to my advisor
Alebachew Asfaw (PhD) who kindly devoted his time and for his continuous encouragement,
helpful comment and tireless in every stage of this thesis. Moreover, I would like to thanks street
vendors of Bahir Dar city for their voluntary support to give proper answer for interview by
devoting their time. Last but not least, I would encompass my genuine thanks for my families
and friends that support me for the collection of data in the field work and the entire thesis work.

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 Table of contents

Contents
Declaration ....................................................................................................................................... i

Approval of thesis for defense ........................................................................................................ ii

Approval of thesis for defense result ............................................................................................. iii

Acknowledgment ........................................................................................................................... iv

Table of contents ............................................................................................................................. v

List of tables.................................................................................................................................... x

List of figures ................................................................................................................................. xi

Acronyms ...................................................................................................................................... xii

Abstract ........................................................................................................................................ xiii

CHAPTER ONE ............................................................................................................................. 1

1.1. INTRODUCTION ................................................................................................................ 1

1.2. Background of the study ...................................................................................................... 1

1.3. Statement of the problem ..................................................................................................... 3

1.4. Purpose of the study ............................................................................................................. 5

1.5 General objective of the study ............................................................................................... 5

1.5.1 Specific objective of the study........................................................................................ 5

1.6 Research questions ................................................................................................................ 6

1.7 Significance of the study ....................................................................................................... 6

1.8 The scope of the study........................................................................................................... 7

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 1.9. Description of the study area ................................................................................................ 7

1.10 Limitation of the study ........................................................................................................ 7

1.11 Operational definition of terms ........................................................................................... 8

1.12 Conclusions ......................................................................................................................... 8

CHAPTER TWO ............................................................................................................................ 9

2. REVIEW OF LITERATURE ..................................................................................................... 9

2.1 Theoretical review of literature ........................................................................................ 9

2.1. 1. Definition of street vendors .......................................................................................... 9

2.1.2. Criminological and Sociological Theories of Street Vending ....................................... 9

2.1.2.1. Strain theory ............................................................................................................. 10

2.1.2. 2.The Rational Choice Theory..................................................................................... 10

2.1.2. 3. The Routine Activity Theory ................................................................................... 11

2.1.2.4. The Chicago school of thought theory ..................................................................... 11

2.1.3. The Unique Features of Street Vending Operations .................................................... 11

2. 1.4 Pulling Factors for the Growth of Street Vendors Operations .................................... 12

2.2. Empirical Literature Review .............................................................................................. 13

2.2.1. The consequences of Street Vending........................................................................... 13

2.2.1.1. Positive consequences of street vending .................................................................. 13

2.2.1.1.1. Street vending as an instrument for poverty Reduction ........................................ 13

2.2.1.1.2. Incremental effect on Gross Domestic product (GDP) ......................................... 14

2.2.1.1.3. Street Vending as a Source of Employment creation ............................................ 14

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 2.2.1. 1. 4. Street vending as the source of growth ................................................................ 15

2.2.2 Negative Consequences of Street Vending .................................................................. 16

2.2.1.2. The negative consequences of street vending on local government revenue ........... 16

2.2.1.2. The negative impacts street vending on society and environment ........................... 17

2.2.2 Possible remedial measurements to reduced negative impacts of street vending

activities ................................................................................................................................. 18

2.2.2.1. Amending Organizational and Participative Behaviors ........................................... 18

2.2.2.2. The Local Government Should Collect Tax Revenue .............................................. 18

2.2.2.3 Arranging Time and space ......................................................................................... 18

2.2.2.4. Minimizing the Rural-Urban Migration ................................................................... 19

2.2.2.5 Launching of Public Services .................................................................................... 20

2.2.2.6. Giving license to the system ..................................................................................... 20

2.2.2.7. Delineating everyday movement .............................................................................. 20

2.2.2.8. Enhancing the Roles by Nongovernmental organization in supporting street vendors

............................................................................................................................................... 20

2.2.2. Other Related Empirical Literature Review ................................................................ 21

2.3 Conceptual Framework of the Study ................................................................................... 23

CHAPTER THREE ...................................................................................................................... 25

3. RESEARCH METHODOLOGY.............................................................................................. 25

3.1. Research Designs ............................................................................................................... 25

3.2. Sources of Data .................................................................................................................. 25

3.3. Sampling size determination .............................................................................................. 25

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 3.4 Model Specification ............................................................................................................ 26

3.5. Methods of data analysis .................................................................................................... 27

3.6. Diagnostic test (i.e. post estimation test)............................................................................ 27

3.6.1. Test of hetroscedasticity .............................................................................................. 27

3.6.2. Test of Multicollinearity .............................................................................................. 28

3.7. The definitions of variables and expected sign of explanatory variables .......................... 28

CHAPTER- FOUR ....................................................................................................................... 31

RESULT AND DISCUSSION ..................................................................................................... 31

4.1. Descriptive analysis............................................................................................................ 31

4.1.1. Demographic characteristics of respondents ............................................................... 31

4.1.1.1. Sex and Family size of respondents ......................................................................... 31

4.1.1.2 Respondents Age, Marital statues and educational back ground .............................. 33

4.1.2. The cause of street vending in the study area.................................................................. 35

4.1.3. Prior occupation of vendors in Bahir Dar city ................................................................ 37

4.1.4. The association ship between Street vendor’s source of capital and local government
revenue using chi-squared test statistics ................................................................................ 39

4.1.5. The significance of street vending for vendors and its association ship with local
government revenue .............................................................................................................. 40

4.1.6. Street vending and vending sites ................................................................................. 41

4.1.7. Mechanisms of Improving the Street Vending Business............................................. 42

4.1.8. Alternative solution to reduce negative impacts.......................................................... 43

4.1.8 Additional Mitigation to minimize the drawbacks of street vending ........................... 43

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 4.1.9. The opinions of respondents towards organizational and participatory marketing ..... 44

4.2. Econometrics analysis ........................................................................................................ 45

4.2.1 The Logistic regression Model Result .......................................................................... 45

4.2.2. Checking for multicollinearity and hetroscedasticity problem .................................... 46

4.2.2. The Robust Logistic Regression Model Result ........................................................... 48

4.2.3. The interpretation of robust logistic regression result ................................................. 49

CHAPTER FIVE .......................................................................................................................... 52

CONCLUSION AND RECOMMENDATION ............................................................................ 52

5.1 Conclusion........................................................................................................................... 52

5.2. Recommendation................................................................................................................ 53

References ..................................................................................................................................... 54

Appendixes ................................................................................................................................... 61

ix
 List of tables

page

Figure 2.1 conceptual frameworks on the effect of street vending on local government revenue ............. 24

Figure: 1 distribution of respondents based on sex ................................................................................... 31

Figure: 2 distributions of respondents based on family size ...................................................................... 32

Table: 4 distributions of respondents by age ............................................................................................. 33

Figure: 4 distributions of respondents based on marital status .................................................................. 34

Figure: 5 distributions of respondents based on educational background ................................................. 35

Figure: 7 prior occupations of respondents .............................................................................................. 38

figure: 8 the respondents sources of start-up capital ................................................................................. 39

Figure 9: the organizational and participatory marketing system of Bahir Dar city evaluated by street
vendors ..................................................................................................................................................... 45

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List of figures
Page
Figure 1: the geographical location of Bahir Dar city. ................................................................................ 7

Figure 2: conceptual frameworks on the effect of street vending on local government revenue ............... 24

figure 3: The definitions of variables and expected sign of explanatory variables .................................... 28

Figure: 4 distribution of respondents based on sex ................................................................................... 31

Figure: 5 distributions of respondents based on family size ...................................................................... 32

Figure: 6 distributions of respondents by age............................................................................................ 33

Figure: 7 distributions of respondents based on marital status .................................................................. 34

Figure:8 distributions of respondents based on educational background .................................................. 35

Figure: 7 prior occupations of respondents .............................................................................................. 38

figure: 8 the respondents sources of start-up capital ................................................................................. 39

Figure 9: the organizational and participatory marketing system of Bahir Dar city evaluated by street
vendors ..................................................................................................................................................... 45

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 Acronyms
Center for International Trade, Economics and Environment CITEE
City Vending committee TVC
Consumer Utility and Trust Society CUTS
International Conference on Labor Statistics ICLS
Ministry of Urban Development and Construction MUDC
Ministry of Urban development and Housing MUDH
National institute for development Administration NIDA
Non-governmental organizations NGOs

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 Abstract
The concerns of street vending are common in different urban areas across the world although
the impact may perhaps vary from country to country. The main objective this study was to
examine the effect of street vending on local government revenue in case of Bahir Dar city,
Ethiopia. The research design in this study was cross-sectional survey design and probability
sampling technique was used to take the sample of street vendors. The instruments that were
used to collect the primary data were interview and direct personal observation. To achieve the
stated objectives 384 street vendors were taken as the representative sample. This was used both
descriptive and inferential analysis, the descriptive analysis was performed through tables,
different charts and Chi-squared test statistics despite the fact that the inferential analysis was
conducted through logistic regression model with some post estimation test. The descriptive
analysis portrayed that Concerning to mitigation measures of these negative influences of street
vending the concerned bodies must be: Setting marketing places zone, Change the territory of
business, Regarding to pollution making waste collection, Setting time schedule to reduce
congestion or space conflicts, setting Organizational or participatory marketing system. Whereas
the inferential analysis depicts that age of street vendors, family size of street vendors, annual
income of street vendors, years of engagement and training delivery by concerned bodies to
street vendors associated with business idea were highly determined the local government
revenue which was quantified as the stall fees incurred by the street vendors. To overcome the
undesirable effects of street vending the entire stakeholders such as local government, public and
non-governmental organizations should work accommodatingly in shaping urban spatial
problem such as reduces the problem of congestion, delaying of foot hikers and government
should set suitable market instead of denying from their livelihood.

Key Words: street, vending, vendors, local, government, revenue and Ethiopia

xiii
 CHAPTER ONE
1.1. INTRODUCTION
This section describes a hypothetical argument of the informal sector in general as well as
street vending in particular and local government. Different writers have used different
terms to explain the informal economy. It has been termed irregular economy (Ferman,
1973), the underground economy, the black market (Rakowski, 1994) or the hidden economy
(Frey and Pommerehne, 1984). In addition to these, the commonly we can use the term like
veiled, plunged, indistinguishable, shadow, uneven, non-official, unrecorded or secret
(Losby et al . 2002). The mutual run through is that informal activities in many countries,
especially in less developed countries are not recognized by their governments.
According to ILO (2002) as cited from Lyons and snoxell (2005) African informal sector was
approximately over 60% of all urban jobs and over 90% of all new urban jobs, even though
estimates differs , street vending has been estimated to account for the largest share of these
jobs after home work. Cohen (2004), also suggested the upsurge is much speedier in Sub-
Saharan African cities, where urbanization has not been convoyed with corresponding
economic progress.

1.2. Background of the study

The classification of the economy into two sectors has a long tradition, specifically organized
and unorganized. According to international labor organization (1972) unorganized economic
sector is an informal sector which includes many economic and productive activities. In other
words, informal sector is very small scale units producing and distributing tangible and
intangible products, comprising mostly of independent, self-employed person in most urban
areas of developing countries, some of whom also employee family labor or a few hired
workers, which operate with little capital or none at all. Bromely (2000) also suggested that
informal sectors operate at low productivity, which utilized a low level of technology and
skills, which deliver very low and irregular income, highly unstable employment. They are
informal in the intellects that they are not registered and recorded in any official statistics;
they have a tendency to have little or no access to organized markets, to formal education and
training institutions.
The international conference of labor statisticians (1993) define street vending as an
economic activities, such as production and distribution of goods and services by operating
units of households which is basically different from the formal economic sector in terms of

1
the adoption of technology, economies of scale, the application of production techniques (i.e.
labor intensive capital intensive and neutral techniques of production) and the virtual absence
of well-maintained accounts.
The causes for the emergency of the informal sector are important form the view point of
developing policies, with the implementation of the structural adjustment programmers, street
vendors tend to misplace ground in the formal sectors of the economy. Stagnating and falling
income of household heads due to the fact that the poor performance of the economy also
leads to escalating the new entry street vendor in the market (Sethuraman, 1976).
Due to the fact that, the socio-economic changes in many countries, the street vending has
practiced significant growth during the past decades. Urbanization and population growth,
especially, in third world countries are expected to continue into the subsequent century and
street- vended commodities, which are largely not exclusively an urban miracle, which
expands consequently (WHO, 1996).
Street vending is an informal or unorganized activity which takes place outdoor bounded
ground or covered worked space on street roadways, footways, at bus stop and in other public
places carried out by self- employed workers (i.e economic Dualism) . Those self-employed
workers are in the street vending activities categorized in to three broad categories, namely
mobile, semi-mobile and stationery. These activities are among the urban informal economic
sector that has attracted sustained academic and policy attention for the last several decades
in different context (Sharit, 2005).
The informal economic sector in general as well as street vending in particular connotes a
vital part of the economy and the labor market in many countries, especially in developing
countries, play a significant role in the creation of employment, production, distribution and
income generation. Even though, street vending is a fundamental challenge for the new
urban agenda is to the situation of quality employment alongside quality environment as the
pillars on which sustainable urbanization may take place. This challenge is very potent when,
in most regions of the south part of the globe, informal employment accounts for more than
half of the total employment and when self- employment offset formal employment or wage
employment. However In relation to self-employment, street vending is among the most
visible occupation, yet few cities successfully balance the need to support livelihoods with
the need to manage the public interest (Nsakanya and Phiri, 2018).
CSA (2012) on the 15th international conference on labor statistics clarified at people
involved in survival and work in private households were excluded from formal economic
sector. As a result, it is problematic to estimate the development of local as well as national
2
economy of the region. In contrary, low economic activity rate also represents lack of training
for this low productivity of the street vendors which leads to little or no contribution to
development.
Contrasting with other entrepreneurial activities, street vending business is often entered due
to inevitability, instead of opportunity. This implies that people sell things on the streets
because formal employment possibilities are not available to them, partially due to their
insufficient education level, skills and capital (Sparks and Barnett, 2010). In many countries,
street vending is considered as illegal or its juridical status is unclear and street vendors often
face harassment from city authorities, formal business and the public (Lyons. et al, 2014) .
Most of the time street vendors are working long hours under unhealthy and unsafe
conditions. This is due to the existence of poor infrastructural facilities where street vendors
operate does not only impact their health and livelihood negatively; it also derives up the
costs and makes them susceptible to exploitation (Wongtada, 2014).
Generally street vending is an important basis of income especially for many poorer section
of the society in different urban areas. Nevertheless, the participants are considered as illicit
entities and are exposed to endure harassment by local authorities. Every single business day
face a challenge to their survival because they do not have legal recognition. A picture of
their daily life depicts different image, symbols and spaces (Yohannes, 2014).
Resembling to other third world country cities or towns the concern of street vendors is
common mostly in different Ethiopian large cities and towns. Since Bahir Dar is the large
regional city, it has significantly large number of street vendors who are not pay tax to the
local government and which cases different problems for the city people. The city is one of
the largest northern parts of Ethiopia city which is characterized by the existence of large
number of migrant population from neighboring cities and towns that do not get formal job.
The migrant that is first engaged in causal work was joined in street vendors’ activities for
temporary survival. The deriving intention to do this research in this area is the prevailing
large number of street vendors and its effect on local government revenue, with the special
emphasis on potential tax revenue if the street vending activities are legalized in the study
area.

1.3. Statement of the problem

In the most countries the development of the local government will be only possible if it is
supported by a certain amount of financial capacity mainly originated from the local
government through decentralization. Decentralization needs local government to be able to

3
make its own revenue. The local government is in a dire need to manage their financial
capacity due to the degree of self-determining in local revenue will have a positive effect on
the degree of local government autonomy. This implies that the local government can
generate more local revenue and it indicates more autonomy will achieved the local
government. So that the autonomy power of the local government allows them to formulate
policies to generate revenue either through natural resources consideration or through
taxation policies (Tutik, R.2014).
In Ethiopia the development gap among regional (local) governments are still apparent.
However in most Ethiopian large cities and Towns Street vending causes loss on local
government revenue because they did not pay tax for municipality and till now it is not
recognized and regulated by concerned government bodies (Degu, 2015).

Moreover, these taxation policies turn out to be irresponsible policies as the local
governments realize everything as a tax entity, henceforth the tax entity and the tax base has
grown to wide, often overlying with tax policies from the central government and at times
one objects are being taxed with two more tax policies. Informal sector particularly street
vendors are seen as among a potential tax object for its visibility by local governments
(Adhikari, D. 2017).
Under Conservatively understanding reasoned that street vendors evade taxes and causes
overcapacity the city roads, block legal business shops, sold low quality commodities, sold
perilous foods, dispose garbage’s in improper area etc. even though the importance to street
vendors is vital for the majority of the population in contrast their activities causes sanitation
of the city or the town and this resulted health problem on street vending commodity users as
well as the participants in vending activities (Gazetted, 2016). For the reason that, large
number of workers engaged in street vending activities make difficult to know clearly their
contribution to gross domestic product (GDP) since they are not recorded and not pay tax
(Adhikari, 2012).
In Ethiopia some studies were conducted in relation to street vendor, which depicted that
they have relatively short tradition, for example the study by: (Etsubdink, 2015) tried to
examine challenges and prospects of informal sector in alleviating urban poverty in Yeka
Sub-city of Addis Ababa city administration, (Habte, 2019) stressed to scrutinize the
challenges and opportunities of street vending in Addis Ababa: the case of Yeka sub-city,
(Getahun and Francesca, 2014) about the economic returns of network resources to the urban
informal sector in Addis Ababa, (Yohannes, 2016) focused on challenges and opportunities
4
of women participating in informal sector in Ethiopia: in case of Arba Minch city, (Addisu,
2017) examined on the cause and consequences of street vending in Oromia region the case
of Jimma city and (Amsale, 2017) studies about street vending and local authorities in Addis
Ababa city.
Nearly all of the above Ethiopian studies primarily conducted by using descriptive statistics
and draw the conclusion. But in a nutshell, descriptive statistics do not attempt to draw
conclusion about the population from which the sample was taken. Conversely, with
inferential statistics, we can testing the hypothesis and drawing conclusions about population
based on the selected sample, in this case, this is done through by running elaborate sounding
concepts like analysis of statistical inferences and logistic regression analysis with some basic
diagnostic tests (Ramachandran and Tsokos, 2009). Frees (1996) and Freud (1992) argued
that in order to get reliable and accepted result it is advisable applying both descriptive and
inferential statistics simultaneously. This study will try examining the effect of street vending
on local government revenue in case of Bahir Dar city to fill the above methodological gap
by considering both the descriptive and inferential statistics.

1.4. Purpose of the study

The purpose of this study will to assess the effect of street vending on local government
revenue in Bahir Dar city, which is the regional center of Amhara. The study will aim to
understand the critical influences of street vendor’s activity which is measured by the average
annual income of vendors and other related factors like delivery of training of vendors by
municipality, educational level of vendors, family size of vendors, working experience of
individuals in street vending activity, age of street vendors and startup capital on local
government revenue if the business is legal. So as to accomplish this aim, this study was
applied logistic regression model with associated post estimation tests designed by different
scholars.

1.5 General objective of the study

The main objective of this study was to know the effect of street vending on local
government revenue in case of Bahir Dar city.

1.5.1 Specific objective of the study

Since street vending is illegal activity in nature, vendors do not pay actual tax to the local
government, so that this study was used stall fee that street vendors pay to government as a
proxy variable for local government revenue. By considering these issues, this study was
addressed the following specific objectives.

5
  To identify the major challenges that limit street vendors change to their business to
legal business in case of Bahir Dar city.
 To examine the effect of street vending on local government revenue in case of Bahir
Dar city.
 To put forward different possible solution that may minimize the street vendors’
activity to the local government in case of Bahir Dar city.

1.6 Research questions

Based on the above specific objectives, this study was tried to answer the following research
questions.
 What are the main reasons that forced street vendors remain in street vending
activities in case of Bahir Dar city?
 What is the significance of street vending on local government revenue in case of
Bahir Dar city?
 What measures should be taken by concerned government bodies and actors to
Minimized Street vending in Bahir Dar city?

1.7 Significance of the study

The findings of the research will targets to get to light opinions of street vendors in thoughtful
why do not trade from recognized chosen marketplaces. Additionally, to produce real-world
evidence that will notify policy implementers, therefore they are capable to understand the
changing aspects of street vendors at minimum by bearing in mind the opinions of vendors.
Local development experts will also gain better understandings in handling the difficult of
street vending meanwhile chances for involvements as well as policy breaches will be
recognized.
This study will valuable to deliver evidence about the existing situation of street vending
activities in Bahir Dar city. It will also create better understanding for the communities to
know, how street vendors run their business and their impact on the progress of the city. In
addition to these, it will also enable to overcome different problems triggered by street
vendors’ particularly spatial complications for instance congestion, pollution and delaying of
ordinary pathway. Moreover, it will also help for those who will be interested further
research on related issues.

6
 1.8 The scope of the study
The study will be delimited the effect of street vending on local government revenue in case
of Bahir Dar city. Within the domain of the participants of street vending, this study will be
focused on sub cities with more street vendors than less street vendors in the study area.

1.9. Description of the study area

This research will be conducted in Bahir Dar city which is the capital city of Amhara
National Regional State. Bahir Dar city is located south of Lake Tana and north-west of
Addis Ababa, which far from it approximately 578 km. It is located at 11 036' north and 37023'
east and has an average elevation of 1801 m above sea level. The city has a total area of
215.57 Km2 (Gashu and Gebre-Egizabher, 2019). In addition to this, according to the Central
Statistical Agency in 2017 the total population of the city is 362,297 (CSA, 2017). The study
will be purposively selected three vending zones (namely: Addis Alem Gebiya, kebele 14
Awnara Gebiya or Addisu Gebiya and from Azwa hotel to Papires, from Papires to St.
Georgis church) with highly concentrated street vendors to take sample respondents.

Figure 1: the geographical location of Bahir Dar city.

1.10 Limitation of the study

Any research is an action which requires several important things to achieve the desired
objectives. When conducting this research different challenge may be faced such as lack of
survey document in municipality, some respondents may be unwilling for interview and lack of

7
awareness towards research or they may be unable to understand what research mean and some
respondents may be uninterested to deliver necessary information.

1.11 Operational definition of terms

Street vending: it refers to the most visible activities in the informal economy and it is found
all over in the world, especially in the third world countries. Moreover, it is the site of trade
that comprises transaction without license, trading outside legally selected transaction sites
and non-payments national taxes or self –distribution of housing for transaction (Amsale,
2017).
Street vendor: A Person who offers goods for sale to the public without having built up
structure from which to sell, they may be stationary in the sense that they occupy space on the
pavements or other public and private space, or they may be mobile in the sense they move
from one place to another by carrying their wares on pushcarts or in the baskets on their
hands (Bhowmik, 2005).
Local governance: in this study this implies that to the actions that the public performed at
diverse ranks of government authorities under the center and designated as arrangement and
procedures of communal judgments making at the local level (Hemsing, 2002).
Informal sector : in this study, it refers to the street vending, home centered and small
business possessed by individuals and mostly run through family labor, moreover it does not
have book of account or it does not have a warrant: but their goods and services, they are
involved in is largely for market.
Illegal Economy: states the production and delivery of legitimately forbidden goods and
services. This embraces such accomplishments as drug trading, prostitution and illegal
gambling (Smelser and Swedberg, 1994).

1.12 Conclusions
Generally there are different controversial issues on street vending activities; by bearing in
mind this the study was tried to examine the effect of street vending on local government
revenue in Bahir Dar city. In order to achieve the stated objective, the study was applied both
qualitative and quantitative research approaches with some basic post estimation tests. The
qualitative approach was achieved through descriptive statistics while the quantitative
approach was accomplished by using logistic regression model.

8
 CHAPTER TWO

2. REVIEW OF LITERATURE
Under this section this study gives more emphasis to theoretical and empirical review of
literature. The theoretical literature aided to enlighten the research variables highlighting the
effect of street vending on local government revenue and the corresponding urban policing.
In addition, the empirical literature focused on the previous studies permitting the researcher
to realize how other researchers have articulated successful lines of analysis within the wider
range of street vending as well as narrowing the existing knowledge gap. Additionally, this
chapter gave factors responsible for street vending, which are positive and negative
implications of street vending in Ethiopia and other countries, especially developing countries
are going to be discussed. For the reason that these theories and empirical results are vital so
as to conceptualize the study and used as sympathetic ideas in line with the discussion of the
findings in this study.

2.1 Theoretical review of literature

2.1. 1. Definition of street vendors
Like other terms or phrases street vendors have different definitions, which is defined by
different scholars, according Bhavan (2009), street vendors are individuals who have no
formal fixed occupation in legal sector due to low level of education and skill. For that reason
they run this business as their main livelihood by their insufficient resources though, this
business activity do not come across their need. Timalsina (2007) argued that street vendors
are immobile or mobile who inhabit on the public or private spaces through carrying their
materials on push charts or in cycle or by baskets on their head, or may sell by moving. The
other definition is coined from Indira (2014), street vendors include those of who vending
goods and services in public places with temporary built up arrangement.

2.1.2. Criminological and Sociological Theories of Street Vending

In generally speaking, street vending is an ancient run-through in cities and towns all over the
world. The main participants are economically disadvantageous individuals, such as poor,
unemployed and uneducated individuals. Street vending help as a complementary deed
where, individuals in the recognized sector employ it as the main handling mechanisms to
handle the adverse effect of general increments of price level of goods and services or the
9
escalation of money supply for the prearranged activity (Msoka, 2007). Cross (2000) also
advocated that street vending usually falls within the classification of unrecognized economic
activity. This classification have some basic features such as, the production and exchange of
legal goods and services that encompasses the nonexistence of appropriate business licenses,
abuse of zoning encryptions, failure to report tax liability, non-compliance with labor bylaws
leading contracts and working environments, and lack of permissible warranties in relations
with dealers and customers. Basically, there are numerous advocators that endeavor to
enlighten street vending as a crime. Amongst, strain theory, rational choice theory, routine
activity theory and social disorganization theory are the most basic theories.

2.1.2.1. Strain theory

Merton (2002) advocated that people are law-enduring even though, when under great
pressures will leads to law-breaking. According to this theory, this pressure as springing from
a discrepancy between objectives and means. Adler et al (2007) also postulates that all
participants of the society subscribe to one set of cultural beliefs that of the middle class.
Based on their arguments, this theory highlighting the significance of the two essentials in
any society which are cultural and aspirations or goals that people that visualize, this means if
the society is to be steady, then these two essentials must be realistically thriving unified.
Thus, there should be means for individuals to accomplish the goals that are important to
them. In addition to these, Lilly et al (2007) also support the strain theory as disparity
between goals and means fosters frustrations which lead to strain.

2.1.2. 2.The Rational Choice Theory

There are some advocators of this theory, Cesare (1794), postulates that crime is unrestricted-
willed choice. This happens when the anticipated paybacks offsets the costs, so that people
follow self- interest in the nonexistence of effective penalties. Moreover this theory is more
popularized by Cornish and Clark (1986) and Becker (1968), they argued that potential
offenders decide on whether to perform crime after carefully bearing in mind possible
rewards and risks. In addition to this, Lilly et al, (2007) and Barkan (2012) posits that any
individual in the given society obliges crime after deciding that the rewards compensate the
risks and does not commit after determining that risks outweigh over rewards. In order to
making those decisions, the offenders should consider different factors like, possible
opportunities for receiving money from legal professions, the amount of real money they

10
earn, the amount of money that may gain from committing crime, the possibility of being
arrested for committing crime, the possibility of being punished if arrested and the urgency of
the expected punishment.

2.1.2. 3. The Routine Activity Theory

This theory was introduced by Lawrence Cohen and Marcus Felson in 1979 and it postulates
that crime is more probably to happen due to the following three main factors are at the same
time present:
 Encouraged criminals
 Good-looking objectives
 An nonexistence of custody
According to this theory street vending leads to crime that criminals, objectives and
nonexistence of custodians must join at equivalent time and in the equivalent site (Mupfudze,
2017).

2.1.2.4. The Chicago school of thought theory

This theory is also known as social disorganization theory. According to the advocators of
this theory postulates that family as the principal component of socialization which yields
paternal management and role models. The non-existence of these is seen as contributing to
crime and law-breaking. The theory debate that the worth and conduct leading to delinquency
and crime are passed from one generation to another. In line with this, poverty and the
absence of role models are the Chicago school of thought theory and the conditions of
poverty leads to the social disorganization in different ways in turn which leads to higher
crime rates in the future generation (Mupfudze, 2017).

2.1.3. The Unique Features of Street Vending Operations

There are some basic unique characteristics of street vending activities which are identified
by different scholars at different time, such as; firstly, the business is not located at definite
points everlastingly, the business is not governed by any regulative laws and the business
covers wide diversity of works, operations and products (Barth, 1983). Secondly, the
business contribution to self- employment generation possibility especially in third world
countries, the vendors are found in retail trade of different products ranging from natural
product to processed and prepared products, the working environment is unsafe and

11
unhealthy, vendors occupy the lowest position in the long chain of hierarchy and vendors
attracted by economic compulsion, more than any other factors, which motivated the vendors
to do the business (FEDCOT, 2002).

2. 1.4 Pulling Factors for the Growth of Street Vendors Operations

1. Urbanization:- due to the socio-economic changes in many countries, street vending
operations has been experienced growth during the past few decades. Quick progress of
urbanization due to the existence of rural to urban migration had frontrunners to a
prerequisite for nourishing huge amount of working people on day-to-day base away from
their dwellings (Chakrayarthi and Chanet, 1996). According to FAO technical report in 1995
about 50% of the world population is living and working in urban areas. For the reason that,
the remoteness between their home and place of work, nonexistence of speedy transportation
and inadequate time, especially workers and students preferred to eat outside which are sold
by street vendors.
2. Growth of urban poor women:- another polling factor that contributing to the
progress of street vendors is the growing number of mobilization of urban poor women in the
work force. Particularly, street food vendors deliver cheap foods to lower income part of the
society in the urban areas at convenient place (FAO, 2002).
3. Urban employment: - street vending deliver a lot of employment opportunities and a
means survival for millions of residents and pen-urban dwellers (warren, 2002).
4. poverty :- street vendors has be situated to create income a few times above the poverty
line in many developing countries, especially in countries sub-Saharan Countries.
(Jhabyala, 2002).
5. Income to small farmers: - street vending is also very energetic for the provision of
income to many small farmers who supply these street vendors with indigenous produce
products, consequently it stimulating and generating employment in the agricultural sector;
especially this factor is existed in street food vendors (WHO, 1996).
6. Local culture: - another important factor is protection of traditional and local culture,
particularly street vended foods and cooking. The preservation of local and traditional cuisine
in street vended foods is particularly signal in view of more consistent charge in other food
setting up. Several traditional snacks are only preserved through their ability to convince to
consumer as sold on the streets. Intrinsically, street foods can be considered as fast food with

12
a traditional screw given the great variety that could be manufactured easily and cheaply
(WHO, 1996).

2.2. Empirical Literature Review

2.2.1. The consequences of Street Vending
The impacts of street vending on the country’s economic, social and political aspects become
controversial issues as argued by different scholars at different time, furthermore street
vending may positive or negative consequences in line with different parameterization.

2.2.1.1. Positive consequences of street vending

According to the advocators of street vending as an opportunities for the country’s economic
social and political progress, street vending are the furthermost superficial and at their
uninterrupted in the field of self- endowment and reciprocated encouragement. Conferring to
Ofori (2007) street vending vital to fulfilled basic human needs, subsistence strategy and
improve stock of wealth. As a result of, they have no other alternatives, as opportunities in
the focal stream economy are not existed to them. Therefore street vending is not only
contribution of the manner to survive but also deal wide-ranging ground-breaking
prospective. Timalsina (2011) also hypothesizes that street vending should be seen as an
chance for urban deprived people, because it is the main sources of employment to deprived
people, provides goods inn cheaper price for different segment of urban deprived people
which cannot be deliver by the legal business sector and it is also serve as an opportunity of
selling space to greatest of the urban humble in urban areas.

2.2.1.1.1. Street vending as an instrument for poverty Reduction

Mramba (2015) attempt to examine the conception of street vending business (SVB) in
income poverty reduction in Tanzania and based on the result regardless of the role of street
vending in pro-poor economies, it has admitted slight consideration; much has been focused
on its negative consequences such as use of community space, overcrowding of roads, health
and safety dangers, tax elusion the sale of slapdash merchandizes. In Tanzania, street vendors
are frequently concerned with conflict with local government authorities; finally they lose
their goods and cash. This study is principally apprehensive with reconnoitering the methods
of street vending business operation and conceptualized the better mode of operation for
success full income poverty reduction. It is performed by revising prior studies relating to
SVB and the micro informal business sector.

13
According to Rdp (2004) suggested that due to existence of small business under street
vending activity might conceivably improve the food security and reduce the level of poverty,
additionally deprived people from urban areas, specifically street vendors supported the
existence of the other part of urban poor by delivering cheap goods, incorporating foods and
other basic commodities which are very basic to them. While, Indira (2014) concluded that
Not only the deprived individuals but also the middle income groups also assistances from
street vending activities due to the presence of cheap prices obtainable.
Pradeep (2015) also argued that street vending is an important mechanism for the reduction
of poverty due to the fact that, as long as it provide low-cost and diverse local goods for most
urban deprived residents. The regular draggling of African socio- economic and political set-
up that force people enter in to street vending activities as entrepreneurship. So that those
informal dealers are able to deliver income and enable them to satisfy basic human needs
such as foods, accommodations for their families and medications because they have no
health insurances.
Generally from these point of views street vending become the strategy so as to minimized
poverty through the delivery of low-cost goods to poor and middle income urban people, as
the main sources of income for vendors and as a contingency during health problem.

2.2.1.1.2. Incremental effect on Gross Domestic product (GDP)

Some scholars suggested that street vending is the main sources of gross domestic product
(GDP) in Asia and African countries, for instance Chidoko et al. (2011) proposed that most
of the merchandises are accessible to the market through increased production by informal
sector in general as well as street vending in particular leading to improved GDP. Since most
of Asian and African economic activities are dominated by a large portion of countries. The
contribution of informal economic activity to GDP ranges from 50% to 90% for most Asian
and African countries. Notwithstanding the considerable role from informal sector to GDP of
various third world countries, there is insufficient confirmation of informal sector
contributing to economic progress. The main reason behind the fast growth rate of street
vending is the existence of both skilled and unskilled labor engaged in this sector and
receives revenue.

2.2.1.1.3. Street Vending as a Source of Employment creation

The deficiency of employment generation in formal economic sector frontrunners to massive
number of people involved in the informal economic activity in different cities and towns,

14
especially in third world countries. Since street vending is part of informal sector, this sector
delivers for exchange of goods and services without administration directive. Consistent with
these street vendors are a suitable example that encourages uninterrupted consumer
communication without considering government rules and regulations. This permits street
vending to captivate a huge number of labor forces in in effect and quick approach than
formal sector. This implies that street vending becomes the one and only support of an
individual that accompaniment with the formal economic sector, the second become normal
in developed world in contrary with the former. This in turn leads to justifiable improvement
around the world, through crating linkage with economic flexibility, energetic alterations, and
trustworthiness of the informal sector with infrastructure and even new employment creation
by the informal sector (Ruzek, 2015).
Mramba (2015) advocated that there is mismatch between employment creation and urban
labor force of the urban formal economic sector in most labor market around the world,
specifically in Tanzania. The formal sector cannot able to bring employment for all labor
force, due to this motive peoples betrothed to street vending activity as the formal
occupations to earn income in most third world countries. Despite the fact that street vendors
have many roles, they also face many encounters, because the government is not given any
support. So that to support street vendor’s activity the government of Tanzania tries to
develop supportive policies, laws and regulations. This is very important so as to outlook
street vendors as other system of recognized economic activity through positive interventions
of the concerned bodies.

2.2.1. 1. 4. Street vending as the source of growth

According to consumer unity and trust society center for international trade (2009) study
where in countries with zero or very low joblessness assurance and allowance in public sector
employment creation from informal sector is very indispensable. Jointly informal and formal
economic sectors supported each other to produced and distributed desired final goods and
services. Consequently, the linkage amongst informal and formal economic sector is essential
to economic growth and poverty reduction.
Additionally Espinoza (2015) tried to explain the economic effect of street vendors as direct and
indirect, based on this study so as to prepared street vended food, vendors purchase or sell raw
materials is direct impact of street vending on the economy. This encourages supplementary
economic activity in the upstream providers immobilizing and when employees of the
wholesalers devote their receiving incidentally. In contrary retailers devote their money so as to
afforded profit-making goods and sell them to the urban deprived people in value added. The

15
earning that the vendors received from selling their good drives in anywhere to cover cost for
goods acquired and the remaining is providing to their family, this implies inspiring further
economic activity indirectly.

2.2.2 Negative Consequences of Street Vending

There are some researchers who advocated that the negative consequences of street vending,
like Chen (2012) indicated that the progress of production of innovativeness is arbitrated as a
vital element of country total economic progress and development. According to this study
the growth of street vending can also during economic boom in Indonesia, informal sector in
general as well as street vending in particular able to reacting escalation in the demand by
avoidance administrative restraints of the recognized business. Due to the existence of huge
street vending has negative impact on economic growth for the reason that it is not only
promoted to upsurge in genuine usage community services while too shrink the availability of
services to the outstanding agent in the economy. This implies that by reason of the existence
bulky street vending restraints monetary revenue, which could affect the government
spending on different infrastructural facilities and other social services, in turn this may
hamper economic progress.
Ndhlou (2011) also suggested that street vending is one of the key economic activities in the
informal sector space; nevertheless they are considered as illegal and community troubles in
Zambia. In reaction to the problems of street vending the Zambian government put legal
market structure for vendors in such way that creating orderly and safe working environment.
Solomon et al. (2006) also support the negative consequences of street vending as the
difficulties of developing countries accompanying street vending in Ghana. This would leads
to the government organizations like policy makers can be interfere so as to tackling
problems related to the setup of street vending that might be suitable and address negative
impact of vendors operation urban environment. To perform this study, the authors use the
systematic random sampling technique with tools such as interviewing the inactive vendors.
They also use purpose sampling to select street vendors and different concerned public office
workers related to street vending.

2.2.1.2. The negative consequences of street vending on local

government revenue
The impact of street vending activities has continuously arguable concern; first group
believed that street vending ought to be permitted while the second group recommended that
street vending as source for traffic accident and it is risky for the communities. The last

16
group suggested street vending has very important aspect not only those who engaged in it to
live, but also those of who low income people that cannot sustained their day-to-day spending
by creating purchasing in the stock wherever they have to recompense additional for the
identical item for consumption (Dhungel, 2011). In addition to the controversial nature of
street vending, they face a lot of antagonistic and irritation. Due to this reason the street vendors
fight with the local dwellers and governments so as to withstand their business.
Degu (2015) tried to study challenges and coping mechanisms of rural-urban migrants of street
vendors, in case of Damot Sore Woreda migrant street vendors in Addis Ababa. For his study he
uses primary data type by applying interview and direct observation to perform this task
qualitative method of data analysis. The result showed that street vending is enlightened devoid
of the principles of taxation and has no strict regulation, acknowledgment nearby its role
somewhat than hassled by police from their marketing zone is broadly understood as foundation
of which being the delinquent in morphology of cities and oppositions felt about it in taxed legal
business sector. Furthermore, Espinoza (2015) also suggested that street vending is one of the
main components of in formal sector; consequently the government revenue is not collected on
street vending activities for the reason that of recordkeeping of vast government revenue is lost
about 50% for the central government and also 50% for the state.

2.2.1.2. The negative impacts street vending on society and environment

It is obvious that the effects of street vending has continually controversial subject on the ground
that it affect free movement of the community on the street while it sustained a bulky number of
household reduction poverty. Zeru (2015) tried to link street food vendors and training in Addis
Ababa, Ethiopia and indicated that due to the nonexistence of training to street vendors, absence
of adequate sold west disposal and squat attention of street vendors about environmental pollution
crate some basic environmental problems which hinders the lives of the majority of the
community. To response the stated objectives the researcher triangulate both qualitative and
quantitative data collection organized with implements such as interview, questionnaire and
direct observation by using random sampling technique. In line with this result Ndhlou (2011)
also stressed to analyzed street vending in Zambia, in case of Lusaka District and the result
exhibited that the difficult associated to street vendors are they chunk customers from quieted
shops, hygiene associated illness such as cholera, pickpocketing. Conversely the concerned
government bodies should place recognized market; this may leads to street vendors keep trading
from street.

17
 2.2.2 Possible remedial measurements to reduced negative impacts of
street vending activities
2.2.2.1. Amending Organizational and Participative Behaviors
Bhavan (2009) tried to examine national policy on urban street vendors in Ghana and the
result exhibited that creating organizations to performed in involved in marketing so as to
minimize bottleneck problems originated from the existence of street vendors. These
organizations are municipal administrators, urban planners and policy makers in relation to
street vendors. The main legal concerned body is city vending committee (CVC), the basic
roles of CVC are: delimiting vending area and limited zone and make assured that
distribution of space appropriate with prevailing demand of urban street vendors and take the
appropriate action. In addition to these CVC also have responsibility intermittent assessment
to checked the number of vendors are growing or declining in the city, this task is performed
through recording and giving identity cards for street vendors, scrutiny the carrying capability
of the area and make the continuous assessment on the quality of goods which are distributed
by vendors in relation to health.

2.2.2.2. The Local Government Should Collect Tax Revenue

According to Becker (2004) at this time, in Kenya capital city, Nairobi the government
started to registered street vendors in order to earn revenue from them. For that reason, the
topmost success of this record is that street vendors are divert from pestering of
administration. In addition, the result revealed that currently most street vendors in Nairobi
city are disbursing their tax to the government.
The National Institute for development Administration (NIDA) (2010) conducted the research on
street vendors at Patna in New Delhi, India and the study showed that recordkeeping as much as
possible every vendor in translucent way for the concern of tax collection and generation of vast
revenue and it can be supportive for provided that well better urban setup to the street vendors.

2.2.2.3 Arranging Time and space

Ofori (2007) tried to examine the urban street commons problems, special regulation of informal
economic units in Accra, Ghana. The result revealed that the alternative system to manage
cities environment is the duty of individuals who live in the cities. Among these duties;
giving affordable space for street vendors to run their business the basic possible way to
manage cities environmental problems. This conveys suitable for street vending participants
as well as purchasers and minimize struggles among street vending dealers for swapping
space. Additionally, setting rules and regulation for running their business, by setting time

18
plan for instance in the after- lunch time and in the pre-lunch time with bearing in mind
scrubbing prearranged marketing zones. So that, the local government must be taken in to
account mutually the means of support of dealers and controlling of cities. So as to perform
this study, the researcher put on general survey method and uses the secondary source of
selected cities of the third world countries based on published and unpublished brochures
through likening diverse strategies as regards to street vendors.

2.2.2.4. Minimizing the Rural-Urban Migration

Different scholars suggested that minimizing the rural-urban migration is the basic remedial
measurement of the negative consequences of street vending, for illustration Asmame (2011)
strained to scrutinize cause and consequences of rural-Urban migration, the case of Woldiya
town, and northern part of Ethiopia. His result showed that to reduced rural-urban migration
setting unified rural expansion through rising agricultural production, this can be occur;
increasing rural labor productivity, upsurge agricultural different inputs such as fertilizers,
improved seed, deliver pesticides to farmers in rural area, deliver subsidized agricultural
inputs as much as possible, upsurge access to credit, full fill the basic infrastructural facilities
and rearrangement on willingly from tremendously degraded places to potentially productive
irrigable conspiracies may reduce the rural-urban migration.
Akewusola (2013) also conducted research on a means of even developing nations in Nigeria
and suggested that in order to reduce the rural-urban migration the concerned bodies must
providing basic infrastructural facilities for the rural area and dishearten people from going to
cities. This will reduce noteworthy level of rural-urban migration that shrinkage existing
burdens on the urban centers in its place, arranging for altered community services such as
rudimentary infrastructural facilities, clean and safe water, electricity, and school and health
facilities. Furthermore, the study also suggested that rising agricultural production over and
done with delivering modern farming inputs and upsurge the usage of irrigation schemes are
the main factors that reduced the migration of people due to the different problems related
with agrarian.
Gashaw (2002) inspect that the patterns, cause and consequences of urban-ward migration in
the case study of Kombolcha town, in Ethiopia; with the intention of decrease the swift
movement of young aged population to urban area predominantly from rural to urban area the
government must be fortified childhood and prolific population to work and live in original
place.

19
 2.2.2.5 Launching of Public Services
Bhavan (2009) suggested that municipal authority must deliver basic public services in
prearranged street vending spaces like delivery of waste disposal container, communal toilet,
electricity, safe water and storage equipment especially for foods in order to minimized the
negative consequences of street vending activities.

2.2.2.6. Giving license to the system

Ofori (2007) speculates that the city municipality should be admitting vital space for vending
activities in order to get fee from street vendors. If this is implemented efficiently and
imposed the permit system hints to switch overcrowding and environmental effluence.
Moreover the local governments shuffle vendors in other new areas by bearing in mind the
loud ability of highway allotted so as to accomplish tricky of overcrowding, accident and
environmental related health problems.

2.2.2.7. Delineating everyday movement

The local government must be bounding the day to day movement of the street vendors with
the purpose of reducing the entrance of new comers of street vendors. Street vendors must
manners in such techniques this might not be a risk or hazard to public health. So that street
vendors should accrue scrapyard and assembled removal of whichever waste material in all place,
in which waste disposal container must be permitted by the local government (Gazetted).
The National Institute for development Administration (NIDA) (2010) conducted the research on
street vendors at Patna in New Delhi, India and by concerning to traffic overcrowding and related
accident essential to the breadth of road has to be earmarked for everyday movement and
marketing activity has designate allowable indoors demarcated breadth of path with proper space
provision. To do this, the local government should be bearing in mind that street vendors’
activity ought to be completed further from means of transportation movement and concocting
plenty of car parks area for protection of vendors, clienteles as well as for derivers.

2.2.2.8. Enhancing the Roles by Nongovernmental organization in

supporting street vendors
Bhowmik (2005) tried to study street vendors in Asia and specified that endures effort of
nongovernmental organizations (NGOs) to proceeds gone walkers permit, tiresomeness traffic by
perceiving facilities with the media which things to see these concerns. As a result, NGOs come
to an agreement to proceeds survey on street dealers who track their business on the community
domains at that juncture, crate association and reinforced by NGOs then they protected in
government arrangements for poverty reduction. Hence, if it is interacted and established into

20
monetary organizations which will look into extending credit and also provision other products
like indemnifications.
In country like Zimbabwe NGOs sustenance street vendors by creating street sellers in
assemblages and begin reliable meetings to sustenance packages with the belief to legalizing of
street vending activity. Under this situation the NGOs ought to be design and smear on the
business meeting for street vendors on the concern of marketing, credit, skill improvement
(Tonga, 2014). In addition, the Cambodian NGOs operational with street vendors display a lion
share, conversely facilities given by NGOs are not sufficient to escape of influences of street
vending (Kusakab, 2006).
2.2.2.9. Forming Authorized marketable places
The trouble caused by the existence of street vendors has to be curtailed by apportioning
working place for street vendors. This can be done by formulating legal vending space with
key rules and regulations like time restriction in apprehension of overcrowding and uphold of
public hygiene has potential to minimized urban special difficulty. This is also vital to know
the location of the vendors and easy in the time of registration and gradual legalization
(Efroymson, 2015 and Bhavan, 2009).

2.2.2. Other Related Empirical Literature Review

Adhikari, D. (2017) stressed to examine informal street food trade, a source of income
generation in urban Nepal, Kathmandu Metropolitan City by incorporating income level of
street food vendors as the dependent variables and vendors initial capital, educational level
and labour supply as explanatory variables by using multiple linear regression model and
OLS estimation method. Based on the cross sectional data collected from a sample of 50
street food vendors in two key areas, specifically new Bus Park and Ratna Park- thus
principally self and family based labour become a prospect to make revenue for many among
those same urban poor living in Kathmandu Metropolitan city. In turn the study also
suggested that the initial capital, educational level of street vendors, labour supply (i.e.
number of families and other individuals engaged in the business), age of respondents,
average working hour per month and sex of respondents affects the local government
revenue.
Setyaningsih, et al (2019) tried to scrutinize the income level of the street vendors obtained
from selling foods and beverage tourist attraction of suwuk Beach regency. This study
incorporated some basic demographic variables such as role of female workers in informal

21
sector and accomplished the level of education by the vendor. The investigation takes the
variables like initial capital, education level, gender, length of business and number of
workers in affecting the street vendor’s income by using multiple linear regressions model.
The estimation result depicts that the business initial capital, number of workers engaged in
the street vending activity and the length of business have positive significant effect on the
street vendors income, while the remaining gender and educational level has no significant
effect on street vendors income.
Local government had better tax informal sector to upsurge its returns, according to the
legalist school, charging taxation on the informal sector generally as well as street vending in
particular will only upsurge the street vending activities, because legalizing the street vending
activity will not be the recommended policy. In contrary the local government can be charge
tax the street vending activity through the use of informal sector unions which compulsory a
thoughtful of right of residence and consciousness of their public truths to establish them.
This sooner or later also valuable for informal sector as the creation of informal sector
unions, which implies that the formation of linkages and connotations which permits them
having power vies a local government. Moreover, a reasonable tax collection will only take
place when local government is capable to ensure that upon the tax collection, a better
services provision to informal sector in infrastructure, training to vendors and other services
will be recognized, this implies that if these conditions are fulfilled, then the local
government revenue can be improved (Tutik, 2014).
Mazhambe ( 2017) try to assessed the contribution of street vending to the Zimbabwe
economy, the study showed that 86.6% of street vendors in Harare, which is the capital city
of Zimbabwe hinge on completely on street vending as their source of income. Additionally,
the study indicated that street vending contributes to economic progress through employment
opportunities, bringing another basis of income especially for women and provides low cost
products to mainly low-income groups in Harare city. The study recommended that
monitoring authorities and government officials had better set in place regulation and related
policies and strategies that accepted street vendors as the vital performers in the country’s
national economy.
Mramba et al. (2015) examine the way of empowering street vendors through technology in
Dares salaam, Tanzania. They supported that the idea street vending business is imperative
for the economy and especially the living of the poor less educated people in third world
countries, as it arrange for occupation, and a worth for subsistence. Although, street vendors
hindered by a number of challenges, together with low level of education. Basically the study
22
tried to explore street vendors’ business activities, skills and policies so as to put forward
mobile technology based solution to improve street vendors’ business prospects. They
employed qualitative data consisting of interviews and focus group discussions was collected
from total 39 street vendors in dares Salaam, which is the economic core of Tanzania. The
finding showed street vendors run in a puzzling situation and have to employ a number of
further activities and plans as associated to recognized business. These activities required risk
identification and risk mitigation abilities and policies and the ways to deal with numerous
types of insecurity. It was found that in the study area street vendors hold low levels of
business skills and educational background in all areas of business; these two basic problems
in turn hamper the local government revenue. So that to improve the street vendors business
prospects, the study recommended that a number of mobile based technology application cab
be settled in the forthcoming.

2.3 Conceptual Framework of the Study

Figure 2.1 delivers outline to analyze the effect of street vending activities related variables on
local government revenue. Since street vending is a portion of an informal sector creating
employment opportunities combined with its negative impacts on the local government revenue
and the urban environment as well the city authority. So that, so as to legalized the street vending
activities the concerned bodies should reduce the numerous challenging factors towards street
vending.

23
Figure 2.1 conceptual frameworks on the effect of street vending on
local government revenue

 Age of street vendors

Annual income of street
 Training availability
vendors earned by selling
 Years of engagement
different commodities under
in street vending
street vending
 education level of
street vendors
 start-up capital
 family size of street
vendors

Local government revenue which was

quantified stall fee or other related revenue
earned by the local government from street
vendors

Source: adapted from Adhikari, D. (2017).

24
 CHAPTER THREE

3. RESEARCH METHODOLOGY
3.1. Research Designs
This study will be conducted in the selected area of Bahir Dar city. The study will employ
both qualitative and quantitative research approaches. Selecting a suitable design to gather
sufficient and applicable evidence for the study is very vital. Henceforward, according to
Kumar (2011) with a consideration to make the research as efficient as possible to yield
maximum information and to collect relevant evidence, the study use both descriptive and
explanatory types of research. In this study, cross-sectional study design will be used,
because it is better to study the incidence of the occurrence, difficulties by captivating a
cross-section of population. Moreover, descriptive research study attempts to describe
systematically a situation, problem, phenomenon, services or programme or provides
information about the present situations of the community while, the study also will use
explanatory research to clarify the relationship between local government revenue and street
vending.

3.2. Sources of Data

This study will use primary data, because the street vending is illegal activity in nature, so
that the possibility of getting documented data about it is very difficult. By bearing in mind
this, the study will be applied primary sources of data, through structured interview. This
study will be selected interview over questionnaire because street vendors are mobile round
the vending area so as to escape from the harassment of the local government authorities,
under this condition distributing and collecting questionaries’ is impossible. Therefore, by
considering this bottleneck problem this study will use structured interview.

3.3. Sampling size determination

In relation to the sample size determination since the way of knowing total population way
be difficult and in order to address this problem the study will be employee the simplified
formula which was suggested by Cochran (1975) to get the representative sample for the
populations that are large and particularly for population where the total is unknown.

Total Sample size (n) = =

Where Z = the area under a normal distribution curve which depends on the degree of the
confidence that the researcher want. There are different known values based on the

25
confidence level for unknown population we have to take, a confidence level of 95%, Z=1.96,
for 90% Z=1.64 and for 99% Z=2.58. P= the degree of variability, expressed as a decimal,
most of the time scholars used 0.5 (Yemane, 1967 and Cochr an, 1975). e= the level of
precision expressed as a decimal, usually 5% (Yemane, 1967 and Cochran, 1975). After
determining the representative sample from the above formula, the study was purposively
selected four vending zones (namely: Addis Alem Gebiya, kebele 14 Abunehara Gebiya or
Addisu Gebiya, from Azwa hotel to Papyrus from Papyrus to St. Georgis church and new bus
station in kebele 14.) with highly concentrated street vendors to take sample respondents.
Then, the study was taken respondents from each vending zone purposively by equal
proportions. Which implies each vending zone will have 96 representative samples.

3.4 Model Specification

Model mainly focused on how the local government tax revenue has been affected by street
vending earning and other explanatory variables derived from the theoretical and empirical
literature. Since the dependent variable is dummy variable which takes two values 0 for those
street vendors that are not pay tax in the form of stall fee and other related payment and 1 for
those street vendors who are pay tax in the form stall fee and other related payment to local
government, this was examined by using in logistic linear regression model. The general
functional form of the regression, the effect of street vending income and local government
revenue of the Bahir Dar city was expressed as follows.
For the logit model we can specify
P (LR=1) =F (β0+β1INV+β2FS+β3EDUL+β4YE+β5TR+β6AGE +β7Y) --------------------------
(1)

P(LR=1)=
1 ez
For ease of exposition, we can re-write above equation as pi  
1  ez 1  e z
where z= β0+β1INV+β2FS+β3EDUL+β4YE+β5TR+β6AGE+β7Y. To avoid the possibility that
the predicted values might be outside the probability interval of 0 to 1, we to re- model using
pi
the odds ratio as . This ratio is the likelihood, or odds, of obtaining a successful
1  pi

outcome.
pi 1  e zi
  zi
 e zi
1  pi 1  e ---------------------------------------------------------------------- (2)

26
Then we have to take the natural logarithms of the equation (2) and derive

L= =Zi= β0+β1INV+β2FS+β3EDUL+β4YE+β5TR+β6AGE +β7Y------------------------

(3)
Where: LR is local government revenue, EDUL is education level of the household heads, FS
is family size, Y is annual income, TR is training delivery by local government, INV is initial
investment or start-up capital, YE is years of engagement in the street vending and Age is age
of street vendors

3.5. Methods of data analysis

The collected primary data will be analyzed quantitatively and qualitatively. Qualitative data
will be collected through interview and direct observation analyzed thematically. It permits
giving picture of well thoughtful with respect to phenomena and it focus on intellect in
specific concern and highlighted worth, depth and thoughtful even though the choice of
technique reposes on purpose of the research and type of research itself. However there is no
single rule for choosing the methods. And also the nature of the issue requested investigator
to select qualitative method due to the fact that local government cannot be responded
without qualitative approach whereas quantitative method of data analysis will a potential for
figurative numbers to be analyzed using statistical procedures. Denscombe (2007), as cited
from Addisu (2017), those numbers are particularly suitable to measure comparisons and
correlation. Additionally in quantitative way of analyzing data, the collected interview from
street vendors was analyzed by using multiple linear regression model, through STATA 14
statistical package.

3.6. Diagnostic test (i.e. post estimation test)

3.6.1. Test of hetroscedasticity
In the classical linear regression model, one of the basic assumptions is that the probability
distribution of the disturbances terms remains same over all observations which imply that
the variance of the error term is same for all the explanatory values of the explanatory
variable. In order to detect the presence of hetroscedasticity the study will use the most recent
test recommended by Breusch and Godfrey in 1979. The null hypothesis is there is
hetroscedastic problem while, the alternative hypothesis is there is no hetroscedastic problem
(i.e the variance of the error term is constant across the cross-sectional unit). Then according
Gujarati (2004) suggested that in order to fail to reject the null hypothesis p-value (i.e if the
null hypothesis is true then P-value, is the probability of getting the test value, or a more

27
extreme test value) should be greater than or equal to 5% rather than if the p-value is less
than 5% we have to accept the alternative hypothesis. This implies that: H 0: the error term has
different variance (i.e Hetroscedastic) versus H1: the error term has same variance (i.e
homoscedastic).

3.6.2. Test of Multicollinearity

Ragnar Frisch (1934) define the term multicollinearity as the existence of perfect or exact
linear relationship among some or all explanatory variables of a regression model, which is
lies between -1 and 1. If multicollinearity is perfect so that the regression coefficients of the
explanatory variables are indeterminate and their standard errors are infinite. Even if
multicollinearity is less than perfect, still the regression coefficients possess large standard
errors (i.e. in relation to the coefficients themselves), which means the coefficients cannot be
estimated with great precision or accuracy.
Since multicollinearity is fundamentally a sample phenomenon, arising out of the largely
non-experimental data collected in most social sciences, we do not have one single technique
of identifying it or measuring it strength. This study was used two main detecting
mechanisms of multicollinearity suggested by Gujarati (2004), namely high pair wise
correlation among regressors and Variance Inflation Factor (VIF) or Tolerance (1/VIF). The
first detection method refers that if the pair-wise or the zero order correlation coefficient
between two regressors is high, say in excess of 0.8, then multicollinearity is a serious
problem. The problem with this criterion is that, although high zero-order correlation may
suggest collinearity. The second detecting method is as Pseudo R2j, the Pseudo coefficient of
determination in the regression of the regressors Xj on the outstanding regressors in the
model, upsurge near 1, that is as the collinearity of Xj with the other regressors upsurge, VIF
also increase and the limit can be infinite, because VIF=(1/1-r2ij), where r2ij is the square of
the simple correlation coefficient between Xi and Xj. so that as a rule of thumb if the VIF of
the a variable exceeds 10, which happens if Pseudo R2j is greater than 0.9, then that variable
is said to be highly collinear.

3.7. The definitions of variables and expected sign of explanatory variables

Age: this refers to the street vendors which were measured years. Street vendor’s age
assumed to positively affect the local government tax revenue if the street vendors are legal,
because mostly young aged group of the population are highly participate in street vending

28
activity as we compared with the old aged population, assuming that street vendors become
legal if they are worked in a long period of time in street vending activities.
Education: this refers to the educational level of the household participating in street
vending activities measured in years of schooling categorized as giving zero value for
illiterate, one for literate those street vendors who can write and read. It was positively related
with local government tax revenue.
Initial capital: means money spent in starting phase of the business. It was positive effect on
local government revenue, by considering if the start-up capital is relatively high leads to
start formal business while, the low amount of start-up capital leads to start informal business
in turn this frontrunners tax evasion.
Family size: this is continues variable measured as the total number of household members
currently living with in the household. As the family number increase it was expected the
negatively affected local government revenue, by considering sustenance livening standard of
the family, then they prefers run the street vending activity so as to evade tax.
Training: refers to the activities leading to street vendors change their business or idea to
another formal business. The expected sign was positive; because more training is delivered
by concerned bodies leads to street vendors changed their business to formal one.
Annual Income of Street Vendors: it is the continuous variable measured in Birr and as
expected it had positive effect on local government revenue. Moreover, if the annual income
of street vendors is increase, even if the street vendors did not pay actual tax for the local
government still leads to, they incurred more money so as to buy huge amount of
commodities that are traded on the street. Under this condition street vendors are pay tax in
the form of stall fee to the local government.
Year’s engagements: it is the continuous variable measured in years those street vendors
working the business, the expected sign was positive. Based on the postulation that as the
duration of individuals who actively participated in street vending increased frontrunners the
tendency that street vendors divert to the legalize their business and in turn leads to increase
the local government revenue.

29
Table: 1 Variables and their measurement included in the model
Variable Code Type Definition and measurement of
of variables variables
Age of the household Age Continuous Age of the HH head measured in
years
Education level of the HH EDUL Categorical 0 for illiterate, 1 for literate who can
write and read
Family size FS Continuous Number of the HH members
Income Y Continuous Annual Income of HH
Training TR Dummy 1 for HH getting training for
municipality, 0 otherwise
Initial investment INV Continuous The amount of start-up capital
Years of engagement YE Continuous Measured in years that street vendors
working the business

30
 CHAPTER- FOUR

RESULT AND DISCUSSION

The number of sample households encompassed was 384, so as to achieve the stated
objectives the study used both descriptive and econometrics analysis.

4.1. Descriptive analysis

As previously stated, for this study the total of 384 sampled respondents were interviewed.
The descriptive statistics result of the interviewed households’ data this section deals with the
discussion and result on assessing the effect of street vending on local government revenue
the case of Bahir Dar city.

4.1.1. Demographic characteristics of respondents

4.1.1.1. Sex and Family size of respondents
As observed in the table 2 and figure 1from below, the majority of street vendors 243
(63.28%) were males and the remaining 141(36.72%) were female. Based on this survey
analysis males are largely engaged in street vending activities than females, this is in line
with the idea that due to its challenge males are more engaged in street vending activities than
females.

Figure: 1 distribution of respondents based on sex

Source: filed survey 2020

31
Table: 2 distributions of respondents based on sex
Sex Frequency Percentage
Male 243 63.28
Female 141 36.72
Total 384 100
Source: own computation from by STATA 14

Figure: 2 distributions of respondents based on family size

Source: filed survey in 2020

Table: 3 distributions of respondents based on family size
family size Frequency Percent Cumulative
parentage
1 272 70.83 70.83
2 69 17.97 88.80
3 26 6.77 95.57
4 15 3.91 99.48
5 2 0.52 100.00
Total 384 100 100.000
Source: own computation using STATA 14
As we apprehend from table 3 and figure 2 most of the respondents have the family size 1-3,
which are 367 (95.57%) of the total respondents and the remaining 17(4.43%) of the

32
respondents have 4-5 family size. More specifically, 272 respondents live alone, which is
accounted 70.83% of the total respondents in the study area.

4.1.1.2 Respondents Age, Marital statues and educational back

ground

Source: filed survey 2020

Table: 4 distributions of respondents by age

age
frequency percentage
15-24 129 33.593
25-34 218 56.77
35-44 34 8.854
>44 3 0.7861
Source: own computation using STATA 14
From table 4 and figure 3 we can conclude that the age between 25-34 years which account
218 (56.77%). This point outs majority of productive age group of people is running this
business on the street in the study area. Additionally, the young aged respondents are highly
engaged in street vending activities, which is accounted 129 (33.593%) of the total
respondents incorporated in the study.
As we understand from figure 4 and table 5 the majority of street vendors are not married (i.e.
single), which accounted about 299 (77.86%) of the total respondents in Bahir Dar city.
Because most of street vending participants are young aged population and in addition to this,
most of street vending activities are regulated by moving pace to place, so that individuals are

33
not eager to engaged in marriage rather than they prefer living alone. Whereas 66 (17.29%)
of street vendors are married, 10 (2.6%) of street vendors are widowed and the remaining
9(2.34%) of street vendors are divorced.

Figure: 4 distributions of respondents based on marital status

Source: filed survey 2020

Table: 5 distributions of respondents based on marital status
Marital status Frequency Percent Cumulative
divorced 9 2.34 2.34
married 66 17.19 19.53
single 299 77.86 97.40
widowed 10 2.60 100.00
Total 384 100
Source: own computation by using STATA 14
When we assess the educational background of street vendors table 6 and figure 5 depicts that
many of respondents which is 254 (66.146%) completed secondary school and have diploma and
above in the study area. This result is in line with the study in southern India by (Kumar, 2015)
proposed that the majority of street vendors have completed secondary education. More
specifically, in the study area 50.78% of the respondents completed secondary education, because
in Ethiopia context may students cannot achieve the minimum requirements for grade 11th and
university or college level education, then those students diverted their occupation to street
vending activities. That is why most informal sector in developing countries provides a
significant potential of entrepreneurship, because it became source of income especially for less
educated and unskilled individuals (Tshuma and Jari, 2013).

34
Contradictory the above indication legalism and voluntarism also argued that peoples purposely
betrothed small or free-for-all activities to avoid tax and other administrative procedure (Igudia,
2014). From this point of view, it possible to recommend peoples who completed secondary
school education are low skill and are mostly engaged in street vending activities due to shortage
of employment creation in the formal sector.

Figure: 5 Distributions of respondents based on educational

background

Source: filed survey 2020

Table: 6 Distributions of respondents based on educational status

Education level Frequency Percent Cumulative

1-4 38 9.90 9.90

5-8 90 23.44 33.33
9-12 195 50.78 84.11
Diploma & above 59 15.36 99.48
Illiterate 2 0.52 100.00
Total 384 100.00
Source: filed survey 2020

4.1.2. The cause of street vending in the study area

Based on table 7 and figure 6., filed survey result depicts that, the majior factor that motivate
peopels enggeged in street vending activites are due to esay to start 50.52% and lack of
employment opportunities 46.61% , in conterary due to high tax and low salary contributes

35
less for the emergency of street vending in the study area. Therefore, shortage of employment
crration in the formal sector and the easyness nature of the business forced to jion in street
vending activities in Bahir Dar city. This result is confirmed the litratur, similarly Dakar, in
Senegal in same issue reported that the fast growing of informal activities is due to shortage
of employment opportunites and fast growing population as well as rural urban migration
creating employement for this rapidly growing youth population is the main thought-
provoking problem of most of African countries (Ahamadou, 2014).
In antagonistic this study, Ndhlovu (2011) concluded that peoples in Lusaka, Nigeria were
involved in street vending activities is due to they cannot find formal job as a result of
government policies to minimzed the civil servants and up surging privitaization. This is in
line with the idea of dualist school, legalist and voluntarism school of thought because
peoples betrothed in street vending actvities as a result of shortage of emloyment and unable
to fulfill criteria of formal sector means legalist advocated that peoples aviod tax due to
administrative system in the formal sector.

Table: 7 Reasons for joining street vending

Reason joining street vending Frequency Percent Cumulative
Due to unemployment 179 46.61 46.61
Due to high tax 1 0.26 46.87
Due to easy to start 194 50.52 97.39
Due to low salary 8 2.08 99.47
Others 2 0.52 100.00
Total 384 100.00

36
 4.1.3. Prior occupation of vendors in Bahir Dar city
Table: 8 prior occupations of respondents
Prior Occupation Frequency Percent Cumulative
Employed 10 2.604 2.604
Student 90 23.44 26.044
Unemployed 284 73.956 100
Total 384 100
Source: STATA 14 data filed survey result (2020).
As shown under table 8 and figure 7 most of respondents 23.44% of street vendors in the study
area are students before joining this business and 73.956% of respondents were unable to get job
in the formal sector, while the remaining 2.604% of respondents were employed. Additionally
during the filed survey some employed individuals are still engaging in street vending activities.
This result is consistent with the study conducted by Elias (2015) due to unemployment peoples
involved in street vending business. Consequently, it is possible to generalize peoples are
engaged in street activity for the seeking of employment.

37
 Figure: 7 Prior occupations of respondents

Source: filed survey 2020

Table: 9 street vendors source of capital

Source Capital Frequency Percent Cumulative
From friends 93 24.22 24.22
from government and 2 0.52 24.74
others
From parents 67 17.45 42.19
Own money (saving) 222 57.81 100.00
Total 384 100.00

38
 figure: 8 the respondents sources of start-up capital

Source: STATA 14 data filed survey result (2020).

4.1.4. The association ship between Street vendor’s source of capital and local
government revenue using chi-squared test statistics
To concluded the association ship between street vendors sources of start-up capital and local
government revenue originated from the tax revenue in the form of stall fees Chi-squared was
used. As we see from table 10 the Chi-squared test is 9.3403 at 3 degree of freedom and
calculated value is less than the significance level (i.e. 0.025 <0.05). This indicates the street
vendors sources of start-up capital is statistically significance effect on local government
revenue at the 5% level of significance. This depicts street vendor’s sources of income and
local government revenue are significantly correlated. Furthermore, most of the respondents
start-up capital is own money (out of 384 of respondents 213 were start their street vending
activities by their own money) and most of them did not pay tax to government in the form of
stall fees.

39
Table: 10 The association ship between street vendors source of capital and local
government revenue
Do you pay Source Capital
tax from
from friends from governmental institutions from own Total
stall fee?
and others parents money

No 86 1 62 213 362

Yes 7 1 5 9 22

Total 93 2 67 222 384

Pearson chi2(3) = 9.3403 Pr = 0.025

Source: STATA 14 data filed survey result (2020).

4.1.5. The significance of street vending for vendors and its association
ship with local government revenue
To concluded the association ship between the significance of street vending for vendors and
local government revenue originated from the tax revenue in the form of stall fees Chi-
squared was used. As we see from table 11 the Chi-squared test is 6.2158 at 4 degree of
freedom and calculated value is less than the significance level (i.e. 0.0084 <0.05). This
indicates the significance of street vending income for vendors is statistically significance
effect on local government revenue at the 1% level of significance. This depicts significance
of street vending income for vendors and local government revenue are significantly
correlated. Furthermore, most of the respondents used their income for temporary subsistence
(out of 384 of respondents 201 were used their income for their temporary subsistence) and
most of them did not pay tax to government in the form of stall fees. In addition to this, out of
384 of sampled respondents 138 respondents were used their income for their livelihood.

40
Table:11 The significance of street vending for vendors and its relationship with local
government revenue
In what way street vending has been serving for you?
Do you
pay tax For additional For To Tempor To Total
from stall income livelihoo support ary reduces
fee? generation d family subsiste other
nce expenses
No 12 131 18 191 10 362
Yes 3 7 1 10 1 22
Total 15 138 19 201 11 384
Pearson chi2(4) = 6.2158 Pr = 0.0084
Source: STATA 14 data filed survey result (2020).

4.1.6. Street vending and vending sites

Actually the street vendor’s cherry-pick their selling place in different reasons, from table 12,
(56.51%) of respondents responded that they select the area because the site is junction and
convenient for customers. Therefore by observing this result it is possible to suggest most of
street vendors in the study area selected their vending area for the reason that the place is
junction and convenient for customers. This result also supported by the study conducted
Ndhlovu (2011) Lusaka district in Nigeria and Solomon et al, n.d) stated that street vendors
were selected their site for tenacity of accomplishment clients. In addition to this 25% of the
sampled respondents replied that the main cause of selected their vending site due to
proximity. By bearing in mind this, it is possible to suggest the location for vendors is the
matter of proximity road or their home. The remaining 18.49% of respondents answered that
the foremost motivation for choosing their transaction site is due to escape from the
punishment and not paying tax.

41
Table:12 , the reasons that street vendors selecting their vending site
Reasons of selecting the vending site Frequen Percen Cumulati
cy t ve
The area is junction and convent to attract 217 56.51 56.51
customers
The area is close to my house 96 25.00 81.51
To escape from the punishment and not 71 18.49 100.00
paying tax
Total 384 100.00
Source: STATA 14 data filed survey result (2020).

4.1.7. Mechanisms of Improving the Street Vending Business

As demonstrated in table 13, 60.16% of respondents were explained that setting marketing
site is the key to improving the street vending business in Bahir Dar city. Furthermore,
appropriate marketing site is settled with frequent checking through record-keeping by
inspection carrying capability of space conflict, this reduce the possible difficulties caused by
vendors like selling on road side and space conflict may be reduced. According to Ofori
(2007) forming marketing space for vendors potentially change the illegal business to legal
business. In addition to this, changing the territory of business and preparing regarding to
pollution making waste disposal collection accounted for 17.71% and 10.94% respectively
possibly improve the street vending business.
Table 13: Reducing mechanisms of negative impacts of street vending
Recommended solutions Frequency Percent Cumulative
Setting marketing places zone 231 60.16 60.16
Change the territory of business 68 17.71 77.86
Regarding to pollution making waste collection 42 10.94 88.80
Setting time schedule to reduce congestion or 31 8.07 96.87
space conflicts
Rigid implementation of laws in case of 12 3.125 100
obstruction
Total 384 100
Source: STATA 14 data filed survey result (2020).

42
 4.1.8. Alternative solution to reduce negative impacts
As revealed in table 14, 33.59% of respondents were explained that Organizational or
participatory marketing system is the key to reduce waste and pollution drawbacks of street
vending in Bahir Dar city. Furthermore, appropriate Organizational or participatory
Organizational or participatory marketing system is settled with frequent checking through
record-keeping by inspection carrying capability of space conflict, this reduce the possible
difficulties caused by vendors like selling on road side and space conflict may be reduced.
According to Ofori (2007) forming Organizational or participatory marketing system for
vendors potentially reduce the problems caused by street vending activities.
In addition to this Try to Collecting of tax from street vendors, providing of facilities such as
vending stall, waste container, protective tent and others and delineating everyday movement
of people accounted for 33.07%, 28.39% and 4.95% respectively potentially minimized the
difficulties of street vending activities. Based on the illustration in the study area 4.95% of
respondents responded were reported that the municipality of Bahir Dar city demarcating the
road that street vendors not to conquer pedestrian path. In the review literature NIDA (2010)
suggested that the solution for problems related to congestion and accidents is demarcating
the road for pedestrian path in order to restrict vendors attacking pedestrian pass.
Table: 14 alternative solutions for the impacts of street vending
Reduction mechanisms Frequency Percent Cumulative
Organizational or participatory marketing system 129 33.59 33.59
Try to Collecting of tax from street vendors 127 33.07 66.67
providing of facilities such as vending stall, waste 109 28.39 95.06
container, protective tent and others

delineating everyday movement of people 19 4.95 100.00

Total 384 100.00
Source: STATA 14 data filed survey result (2020).

4.1.8 Additional Mitigation to minimize the drawbacks of street vending

As showed in table 15 in this study the researcher asked the opinion of sample street vendors
towards mitigation measures to reduce problems related to pollution due to the existence of
street vending activities, majority (46.35%) of respondents confirmed that cleaning each
individual trading or vending spaces is important to minimized the problems caused by street
vending activities. Reducing the problems caused by vending ids not only apprehension of
the municipality or trade and industry office but is the concern of all citizens for the reason

43
that all infrastructures which is so long as by municipality is the consequence how tax is
helping city infrastructural development and creating awareness for peoples to buy from
formal shop, creating integration with different sector to support vendors who are not able to
fulfill the criteria of formal trade.
The other main minimizing mechanisms for the difficulties of street vending activities is
collecting and keeping wastes that municipality deliver container that accounted 39.06% out
of the total of 384 sampled respondents. Additionally, 14.583% of the sampled respondents
replied that cleaning vending or trading spaces in groups is the main reducing tool for the
complications related to street vending activities.
Table15: the alternative mechanisms of minimizing the problems of street vending
related to pollution
Alternative mechanisms to minimized the Frequency Percent Cumulative
problems of street vending
Cleaning each individual trading/ vending 178 46.35 46.35
spaces
Cleaning vending/ trading space in groups 56 14.583 60.94
Collecting and keeping wastes in municipal 150 39.06 100.00
deliver container
Total 384 100.00
Source: STATA 14 data filed survey result (2020).

4.1.9. The opinions of respondents towards organizational and

participatory marketing
From the main solution the majority (33.59%) of respondents answered that organizational
and participatory marketing would reduce the negative outcome of vending in Bahir Dar city.
Correspondingly, Bavan (2009) stated that organizational and participatory marketing is
significant to minimized difficulty caused by street vending by street vending because it
includes the whole stakeholders such as municipal administrators, urban planners, policy
makers and street vendors association. As we realize from figure 9, 95.83% of the appraised
street vendors responded that the organizational and participatory marketing system is not
well-functioning in the study area. This implies that even if the organizational and
participatory marketing system is the main tackling mechanisms of the difficulties associated
with street vending goings-on, the concerned bodies did not give any attention to it. With the

44
intention of tackling the negative effect of street vending, the concerned bodies should
arrange that organizational and participatory marketing system to be well-functioning.

Figure 9: the organizational and participatory marketing system of

Bahir Dar city evaluated by street vendors

Source: STATA 14 data filed survey result (2020).

4.2. Econometrics analysis

This study makes an attempt to analyze the effect of street vending on local government
revenue in Bahir Dar city. So that in order to achieve the specific objectives that listed under
chapter one in addition to the descriptive analyses, this study perform econometrics analysis.
To perform this task, the study was implemented the binary logistic regression model,
because the local government revenue is quantified in the form of dummy variable as zero
and one (i.e. take the value 1 for those street vendors paid tax in the form of stall fee and zero
otherwise). Consider the following table 16.

4.2.1 The Logistic regression Model Result

Table: 16, logistic regression model
Dependent variable dummy for non-taxpayers or non-stall fee payers
Explanatory variables Coef. Std. Err. Z P>|z| [95% Conf. Interval]
Education Dummy for literate -1.218806 .8101224 -1.50 0.132 -2.806617
.3690045
Age .1496785 .0617289 2.42 0.0158** .0286922

45
 .2706648
Family size -1.307188 .3929657 -3.33 0.001*** -2.077387 -
.5369897
Start-up capital -.0000902 .0002222 -0.41 0.685 -.0005258
.0003454
Annual income -1.6306 .7406 -2.24 0.0012*** -.000015 .0000118
Years engagement -.6249153 .1679862 -3.72 0.000** -.9541622 .2956683
Training dummy for Yes -.4499388 .0807717 - 0.0084*** -2.060296
5.507 1.160419
Constant (intercept) term 4.789688 1.902812 2.52 0.012** 1.060246 8.51913
Number of obs = 384 LR chi2(7) = 28.13 Prob > chi2= 0.0002
Log likelihood = -46.002295 Pseudo R2 = 0.2341

Source: STATA 14 data filed survey result (2020).

*** And ** indicates that the given explanatory variables are significant at 1% and 5% level of significance
respectively.

4.2.2. Checking for multicollinearity and hetroscedasticity problem

One basic assumption of any regression model especially in primary data type is that the
absence of multicollinearity among the explanatory variables included in the model, for the
reason that multicollinearity potentially causes variance between collinear parameters in the
estimation process. Multicollinearity is a common problem when estimating the given
model, including logistic regression model. It arises when there are high correlations among
explanatory variables, leading to unreliable and unstable estimates of regression coefficients.
It is demarcated in terms of a lack of independence or the presence of interdependence
connoted by high inter-correlations within a set of variables. The most widely used detection
mechanism of this problem is the uncentered variance inflation factor (VIF). The VIF may be
calculated for each explanatory variable doing the logistic regression model and obtaining the
pseudo R2 form that regression. The VIF is just 1/1-Pseudo R2; the higher VIF indicates the
presences of collinearity (Gujarati, 2004). For standardized data the mean uncentered VIF
above 10 implies serious collinearity (Daoud, 2017 and Eleni, 2011). As shown from table 17
the mean VIF of the logistic regression model was 5.63 which is below 10, this indicates the
logistic regression model is free from the problem of multicollinearity or which indicates that
there was no statistical evidence of a strong correlation among explanatory variables.

46
Table: 17. Multicollinearity test
Variables VIF 1/VIF
Age 16.01 0.062474
Family size 6.30 0.158726
Training dummy for Yes 3.92 0.255297
Annual income 3.89 0.257145
Education Dummy for literate 3.31 0.301920
Start-up capital 3.26 0.306441
Years engagement 2.70 0.370529
Mean VIF 5.63
Source: STATA 14 data filed survey result (2020).
In the classical regression model, another basic assumption is that the probability distribution
of the disturbances terms remains same over all observations which imply that the variance of
the error term is same for all the explanatory values of the explanatory variable. In order to
detect the presence of hetroscedasticity the study will use the most recent test recommended
by Breusch and Godfrey in 1979. The null hypothesis is there is hetroscedastic problem
while, the alternative hypothesis is there is no hetroscedastic problem (i.e. the variance of the
error term is constant across the cross-sectional unit). Although before performing the
analysis of variance-variance (ANOVA) model, for more information see appendix 1 and
then the study perform Breusch-Pagan / Cook-Weisberg test for heteroscedasticity. As we
understand from table 18, the probability value is 0.00; this implies that we have not strong
statistical evidence to accept the null hypothesis that hypothesized that constant variance or
homoscedastic. So that the logistic model have hetroscedasticity problem, to overcome this
problem different econometricians and statisticians recommend re-running the model with
robust standard errors (Gujarati, 2004).

Table: 18 Hetroscedasticity test

Breusch-Pagan / Cook-Weisberg test for heteroscedasticity
Ho: Constant variance
Variables: fitted values of model
chi2(1) = 442.67
Prob > chi2 = 0.0000
Source: STATA 14 data filed survey result (2020)

47
4.2.2. The Robust Logistic Regression Model Result
A regression estimator is said to be robust if it is quiet consistent in the existences of extreme
outliers. On the other hand, its standard error is said to be robust if it quiet consistent when
the regression errors are hetroscedastic the enhancement comparative to non-robust standard
errors demonstrated by the means large sample bias calculations, simulations and real data. It
turns out that the non-robust standard errors of robust estimators may be ruthlessly biased.
However, if the hetroscedasticity are absent, non- robust standard errors are more efficient
than the robust standard errors (Gujarati, 2004). Logistic regression is used to obtain odds
ratio in the presences of more than one explanatory variable. The procedure is quite similar to
multiple linear regressions, with the exception that the response variable is binary. The result
is the impact of each variable on the odds ratio of the detected occurrence of concern. The
main advantage of the odds ratio is that avoid the confounding effects by analyzing the
association of all variables together.
Table: 19 Robust Logistic regression result
Dependent variable is dummy for non-taxpayers in the form of stall fee

Explanatory variables Std. Err. Z P>|z| [95% Conf. Interval]

Coefficients
Education Dummy for -1.218806 1.040367 - 0.241 -3.257888 .8202757
literate 1.17
Age .1496785 .0670079 2.23 0.025** .0183454 .2810116

Family size -1.307188 .2975621 - 0.000*** -1.890399 -.7239772

4.39
Start-up capital -.0000902 .0002117 - 0.670 -.000505 .0003246
0.43
Annual income -1.6306 .7406 -2.2 0.033** -.0000168 .0000135

Years engaging -.6249153 .1536802 - 0.000*** -.9261229 -.3237077

4.07
Training dummy for Yes. -.4499388 .0807717 - 0.00593*** -2.097821 1.197943
5.57
Constant (intercept) term 4.789688 1.930366 2.48 0.013** 1.006239 8.573137

Number of observation = 384 Wald chi2(7) = 40.75 Prob > chi2 = 0.0000 Log pseudo likelihood =
-46.002295 Pseudo R2 = 0.2341

Source: STATA 14 data filed survey result (2020).

48
*** And ** indicates that the given explanatory variables are significant at 1% and 5% level of significance
respectively.
In this study the binary logit model portrays that out of 7 variables selected 5 variables, which
age, annual income, family size, years of engagement and training delivery by concerned
bodies of street vendors were found to be have statistical significant effect (at different level
of significance) on local government revenue as detailed under table 20 below. The standard
regression technique for modeling binary response variables in social science research is
logistic regression model. But so as to quantify and communicate the effect of the explanatory
variables on the farmer’s willingness to participate on weather index crop insurance Odds ratio
was applied in this study as presented under table 20.
Table: 20 the robust odds ratio result for the logistic regression model
Explanatory variables Odds Ratio Std. Err. Z P>|z| [95% Conf.
Interval]
Education Dummy for literate .2955828 .3075146 -1.17 0.241 .0384695 2.271126

Age 1.161461 .0778271 2.23 0.025** 1.018515 1.324469

Family size .2705798 .0805143 -4.39 0.000*** .1510115 .4848202

Start-up capital .9999098 .0002116 -0.43 0.670 .9994951 1.000325

Annual income .9999984 7.74e-06 -2.2 0.033** .9999832 1.000014

Years engagement .5353068 .082266 -4.07 0.000*** .3960864 .7234617

Training dummy for Yes .6376672 .5361325 -5.57 0.00593*** .1227235 3.313296

Constant (intercept) term 120.2638 232.1533 2.48 0.013** 2.735295 5287.69

Number of obs = 384 Wald chi2(7) = 40.75 Prob > chi2 = 0.0000 Log pseudo likelihood = -
2
46.002295 Pseudo R = 0.2341

Source: STATA 14 data filed survey result (2020).

*** And ** indicates that the given explanatory variables are significant at 1% and 5% level of significance
respective.

4.2.3. The interpretation of robust logistic regression result

First of all, we have to concern more about the overall goodness of fit of the logistic
regression result which is measured by the Prob, chi-squared, because we cannot interpret
and make conclusion and recommendations the models without appropriate goodness of fit.
Based on table 19 and 20 the Prob, chi-squared is 0.000, which is less than 5%, so that
grounded on the rule of thumb, if the Prob > chi2 value is less than 5%, this implies that we

49
have not strong statistical evidence to accept the null hypothesised that the model have not
appropriate goodness of fit or we have strong statistical evidence to accept alternative
hypothesis suggested that model have appropriate goodness of fit. With the intention of, this
study exhibited that Prob > chi2 value is Farley less than 0.05, which indicated that the model
is have appropriate goodness fit or in other words we have strong statistical evidence to
accept the alternative hypothesis. In addition to this so as to interpret the logistic regression
result, we have to consider the direction of the explanatory variables which are presented
under table 19 and 20. if the odds ratio is greater than 1 so that the explanatory variables have
positive effect on the outcome variable whereas if the odds ratio is less than 1 so that the
explanatory variables have negative effect on outcome variable (i.e odds ratio can be
calculated as εβ where ε is the fixed number which is 2.7182 and β is vector form of the
variables to be estimated).
By bearing mind the goodness of fit of the regression result, we have to interpret the sign of
the explanatory variables, which have significant effect on the tax payments of the street
vendors at different level of significance as we understand from table 19 and 20 as follows:
Age: the age of street vendors are have positive and significant effect on the local
government revenue which is quantified as local government tax revenue collected in the
form of stall fee and other related activities at 5% level of significance. Because mostly
young aged group of the population are highly participate in street vending activity as we
compared with the old aged population, assuming that street vendors become legal if they are
worked in a long period of time in street vending activities. This study was consistent with
the study conducted by Adhikari, D. (2012) in Kathmandu metropolitan city.
Family size: as the family size of street vendors increase leads to local government revenue
in the form of stall fee earn from street vending activities deterioration, because by
considering sustenance livening standard of the family, then they prefers run the street
vending activity so as to evade tax. More specifically, the street vendors have negative
significant effect on local government revenue which is proxy by street vendors who pay tax
in the form stall and other fees related with street vending activities at 1% level of
significance and the reverse is true for street vendors who did not pay any form of tax to local
government.
Annual income: the interpretation of annual income in this model is that for each birr 1
increase in the income of street vendors from their vending activities, the odds of not paying
the tax of stall fee is decreased by 0.01% (1-0.999) at 5% level of significance.
Antagonistically for each birr 1 increment in the income of street vendors from their vending
50
activities, the odds of paying the tax of stall fee (which is dummy variable as the proxy of
local government revenue) is increased by 99.9% at 5% level of margin of error (i.e level of
significance). This implies that street vendors with more income increased local government
revenue in the form of tax revenue from stall fees. This implies that the annual income of
street vendors who did not pay statistically and negatively affected the local government
revenue in general and local government tax revenue. With the intention of, the local
government should legalized the street vending activities through making organizational or
participatory marketing system well-functioning, providing of facilities such as vending stall,
waste container, protective tent and others, delineating everyday movement of people,
Cleaning each individual trading/ vending spaces, Collecting and keeping wastes in
municipal deliver container and Cleaning vending/ trading space in groups.
Years of engagement in street vending activities: as we understand from table 19 and 20
the street vendors experience in street vending activities can be interpreted as the for every
one year increased in their vending activities, the odds of not paying the tax of stall fee is
decreased by 46.469% (1-0.5353068) at 1% level of significance. Antagonistically for each 1
year increments that street vendors staying in street vending activities, the odds of paying the
tax of stall fee (which is dummy variable as the proxy of local government revenue) is
increased by 53.53% at 1% level of margin of error (i.e level of significance). More
specifically, that street vendors with more duration in street vending activities leads increased
local government revenue in the form of tax revenue from stall fees. This is due to the
postulation that most of the street vendors with more staying in street vending activities may
divert in to legal business, this sequentially may leads to increase the local government
revenue.
Training: this variable is the dummy (binary) variable which has two values 1 for those of
who street vendors did takes any relevant training related to business and 0 for those of who
street vendors did not takes any relevant training related to business. Based on this research
result portrayed that that of street vendors who did takes whichever appropriate training
associated with business, the odds of not paying the tax or stall fee is decreased by 36.23%
(1-0.6376672) at 1% level of significance. Belligerently, street vendors who did takes
whichever appropriate training associated with business, the odds of paying the tax or stall
fee is amplified by 63.77% at 1% level of significance. This point toward that, the local
government ought to deliver relevant training for those of who performed street vending
activities in Bahir Dar city so as to increase the local government tax revenue or decreased
problems arise through street vending activities performed in the cities.
51
 CHAPTER FIVE

CONCLUSION AND RECOMMENDATION

5.1 Conclusion
The major factor affecting to engage in street vending in Bahir Dar city was attributable to
deficiency of employment in a recognized sector, easy to start and low salary. Likewise the
influences of street vending, conversely it abridged the unemployment, it help as livelihood
of both street vendors as glowing as inhabitants that are stumpy income peoples. It one at a
time caused traffic overcrowding, tapering of pedestrian path, increased environmental
pollution which reduced the local government revenue and surge up crime in the city.
Concerning to mitigation measures of these negative influences of street vending the
concerned bodies must be: Setting marketing places zone, Change the territory of business,
Regarding to pollution making waste collection, Setting time schedule to reduce congestion
or space conflicts, setting Organizational or participatory marketing system, Try to Collecting
of tax from street vendors, providing of facilities such as vending stall, waste container,
protective tent and others and delineating everyday movement of people.
Besides, the logistic regression result which was presented under table 19 and 20 exhibited
that age of street vendors, family size of street vendors, annual income of street vendors,
years of engagement and training delivery by concerned bodies to street vendors associated
with business idea were highly determined the local government revenue which was
quantified as the stall fees incurred by the street vendors. More unambiguously, the street
vendors with more income increased local government revenue in the form of tax revenue
from stall fees. This implies that the annual income of street vendors who did not pay
statistically and negatively affected the local government revenue in general and local
government tax revenue. With the intention of, the local government should legalized the
street vending activities through making organizational or participatory marketing system
well-functioning, providing of facilities such as vending stall, waste container, protective tent
and others, delineating everyday movement of people, Cleaning each individual trading/
vending spaces, Collecting and keeping wastes in municipal deliver container and Cleaning
vending/ trading space in groups.

52
 5.2. Recommendation
Based on this research result the following recommendations were forwarded, the
recommendations were associated to the action of government and non-governmental
organizations concentrated on street vending activities. Since the annual income street
vendors have significant effect on local government revenue in Bahir Dar city, so that the
local government should try to legalized different street vending activities in the city as
follows.
 Bahir Dar city municipality should create promising situations for rural progress in
directive to minimized rural-urban migration of youth through heartening rural
employment prospects this is done through providing agricultural inputs to enlarged
productivity of agricultural and incentives to create rural job opportunities as well as
social services related to infrastructural facilities like health, education, road that link
rural to urban, electricity these may promising parameters to reduce the out flow of rural
young population and this may sequentially reduce unemployment rate. Basically local
government should organize street vendors in group and encourage them to be recorded
in a group this would help to recognize their site and also vital to plan infrastructure
provision as well as for slow reinforcement.
 To overwhelmed the undesirable effects of street vending the entire stakeholders such as
local government, public and non-governmental organizations should work
accommodatingly in shaping urban spatial problem such as reduces the problem of
congestion, delaying of foot hikers and government should set suitable market instead of
denying from their livelihood. If street vendors are planned or arrange in appropriate
places it enable to curtailed the incidence of the hampering impacts of street vending
which was quantified by annual income of street vendors.
 The local government should create consciousness to alter the attitude of street vendors
towards tax evasion this is performed by the local government and other concerned
bodies give training on the way to wastes disposal inappropriate way or municipality
should deliver waste collection tankers and create awareness to street vendors to clean
their surroundings. Through registering street vendors municipality would arrange for
provision like credit to upgrading street vendors in to legal shop. This may leads to
increase the income of local government to develop basic infrastructure for both vendors
as well as the whole residents of city.

53
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57
 Interview
Bahir Dar University
Faculty of Business and Economics
Department Of Management
This interview is about the effect of street vending on local government revenue in case of
Bahir Dar city and it is prepared and expected to be answered by street vendors engaged in
Bahir Dar a city.
This research is conducted by Bahir Dar University’s prospective Management graduate
students named Mr. Yebeltal Takele undertaing a research “the effect of street vending on
local government revenue in case of Bahir Dar city”.
The main purpose of the research is to explore the core effect of street vending on local
government revenue in Bahir Dar city and valuable recommendations to minimized street
vending.
The result of the interview will be recorded without disclosing your identity and your
personal answer remains secret. Because your willingness and co-operative to genuinely
answer all question plays a vital role in making the study more valuable and dependable, we
humbly request to answer all the questions carefully. I would like to thank in advance for
your time and consideration, in deed.
I confirm that this study has no other intention except academic.
Personal Information
1.1 Gender: Male: Female:
1.2. Age: __________
1.3. Marital status: single married widowed Divorced
1.4. Family size: Male: female:
1.5. Educational Level: illiterate 1-4 5-8 9-12 diploma and
above
2. Street Vending Related Information
2.1. Do you live in your own house? Yes No
2.2. If your response is no in question number 2.1, how do you live?
A. With relatives B. Rent house C. Others

58
2.3. What was your occupation before starting this business before this business?
A. student B. Unemployed C. Employed D. not looking for work
2.4. What is your reason to join in street vending activities?
A. Unemployment B. due to high tax C. easy to start. D. low salary in formal job
E. To get more profit F. other
2.5. What was the major source of your starting capital?
A. Own Money B. from parents C. from friends D. from governmental institutions and
others
2.6. The amount of capital to start the business in terms of Ethiopian Birr._______________.
2.7. What is average annually income from street trading?
______________________________.
2.8. What is the average annual expense? _________________________________.
2.9. Is there other sources of income to cover your expense? A. Yes B. No
2.10. How many years or months you engaged in this business? ________________.
2.11. Have you ever get any training related to formal business idea by the concerned bodies?
A. Yes B. No
2.12. In what way street vending has been serving for you?
A. livelihood B. Temporary subsistence C. For additional income Generation
D. To reduces other expenses E. Support your family E. Financial freedom
F. if you have other reason please specify
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
2.13. What is the reason to select this site to run your business?
A. The area is junction and convent to attack customers B. The area is close to my house
C. To escape from the punishment D. others please specify
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___.
2.14. Do you any tax/ fee for municipality of Bahir Dar city? A. Yes B. No
2.14. 1 if your answer is yes in question number 2.14, which type fee/ tax do you pay?
A. stall fee B. License fee C. others pleases
specify___________________________________.

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2.15. Which mechanism is better to improve your business?
A. setting marketing places zone B. regarding to pollution making waste collection
C. setting time schedule to reduce congestion or space conflicts D. giving one place for
two mornings E. Rigid implementation of laws in case of obstruction
F. if other please
specify_________________________________________________________.
2.16. Do you think organizational and participatory marketing system would decrease the
difficulty caused by street vendors?
A. Strongly agree B. Strongly dis agree C. agree D. disagree
2.17. From the following reducing mechanisms of the difficulty of street vending, which of
the following is applying in Bahir Dar city?
A. Organizational or participatory marketing system B. permit system
C. Collecting of tax from street vendors D. delineating everyday movement
E. providing of facilities such as vending stall, waste container, protective tent and others
2.18. What are the other alternative extenuation measures that may useful to minimized street
vending associated with street vendor’s problem?
A. Cleaning each individual trading/ vending spaces
B. Cleaning vending/ trading space in groups
C. Collecting and keeping wastes in municipal deliver container
D. if other, please
specify________________________________________________________.
2.19. Is Bahir Dar city is your birth place? A. Yes B. No
2.19.1. if your answer is No for questions number 2.19, from where did you come to Bahir Dar
city?
A. from rural area around Bahir Dar B. From other small town around Bahir Dar
C. From other region D. Other please specify__________________________.

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 Appendixes
Appendix : 1 ANOVA Table

Number of obs = 384 R-squared = 0.3502

Root MSE = .18651 Adj R-squared = 0.0123

Source Partial SS df MS F Prob > F

Model 4.72348421 131 .036057131 1.04 0.4006

age 2.32209115 29 .080072109 2.30 0.0003

familysize .555793071 4 .138948268 3.99 0.0037
trainingd~1 .002378191 1 .002378191 0.07 0.7939
eduleveld~2 .162493051 1 .162493051 4.67 0.0316
annuincome 2.24051842 96 .023338734 0.67 0.9878

Residual 8.76609912 252 .034786108

Total 13.4895833 383 .035220844

Appendix: 2 variance inflation factor to detect multicollinearity

Variable VIF 1/VIF

age 16.01 0.062474

familysize 6.30 0.158726
trainingdu~1 3.92 0.255297
annuincome 3.89 0.257145
eduleveldu~2 3.31 0.301920
startcapit 3.26 0.306441
yearsengg 2.70 0.370529

Mean VIF 5.63

Appendx: 3 Sex of resondents based marital status

maritalstaus
geder divrced married single widowed Total

f 8 22 101 10 141
m 1 44 198 0 243

Total 9 66 299 10 384

Appendix: 4 street vendors other soureces of uincome

other sourc income

taxp no no yes Total

no 1 346 21 368
yes 0 10 4 14

Total 1 356 25 382

Pearson chi2(2) = 11.5507 Pr = 0.003

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