Individual theory of poverty and informal sector : linkages or alternative explanations

There has been a huge debate on the impact of individual factors, social factors and structural factors on earnings of people. This paper is an attempt to test the first set of factors, the individual factors in terms of their impact on earnings of street vendors in Vijayawada, Andhra Pradesh. 200 samples collected from two major markets of Vijayawada, One Town and Besant Road, assess the impact of genetic and personal reasons of vendors to be poor in the chosen case studies. The method of path co-efficient has been used to assess the relationships of each variable (age, education, period of stay) with incomes of vendors. The results depict that education has a strong positive relationship with incomes of a vendor. Period of stay is the second most important variable affecting earnings of vendors. It has a negative impact on incomes, i.e., more the duration of stay of vendors in their present occupation less are their chances to earn more. Age is the least important factor affecting income levels of vendors. However, these relationships undergo drastic change when two or more variable are taken together. The results have been tested on a class II city. However, the results might differ drastically if tested on a mega city such as Delhi, Mumbai, Chennai or Kolkata.