Cultural Theory of Poverty and Informal Sector: A Comparison of Street Vendors in Vijayawada and Chennai

The low incomes of poor have been attributed to either their individual factors (such as genetic or their personal choices) or to the socio-cultural factors. This paper is an attempt to understand whether the cultural theory and its associated parameters are equally applicable to different sizes of cities (differentiated by their population sizes). The socio-cultural factors chosen for the study are fourfold: social factors (gender, religion, dependents, choice of occupation and choice of migration), economic factors (occupation before migration), cyclical factors (willingness to stay in the same occupation) and geographical factors (distance of vendors’ native place to Chennai/ Vijayawada). Impact of these factors has been tested on income in the two cities (Tier X {larger}-Chennai and Tier Y {smaller}-Vijayawada) through a Structural Equation Model (SEM). The results reveal that in both the smaller size city (Vijayawada) as well as the larger size city (Chennai) cyclical and economic factors have a major impact on the earnings of vendors. Geographical factors have the least bearing on the income in both the cities. Although social factors are not important in case of Vijayawada, few social factors such as gender, choice of occupation and choice of migration do impact earnings of vendors in Chennai.