The effect of financial capital on inner-city street trading

Abstract

This study extends and tests conceptions offered by the nutrition model of efficiency wage theory into the informal street-trading context. Three street-trader samples from 2008, 2009 and 2010 were drawn from the Johannesburg city centre. Statistical parametric and non-parametric analysis was used for a longitudinal investigation of certain associations of initial investment, or the money investments of street traders at start-up. Partial correlation analysis was used for further analysis of the 2010 sample. Findings suggest that policymaker interventions might best target traders earning under a threshold of earnings of about R230 per day. More specifically, training might offer such traders insight into how to change their product offerings to products associated with higher returns. Further, any interventions that might raise street-trader earnings above this threshold might enable such traders to obtain a positive return on capital invested in the sector.