an Application of the Logit Model to the Analysis of Informal Sector Activities

This paper reports on the results of a research carried out during 1993-94 aiming at studying street sellers as an informal sector activity and a source of socio-economic problems in Shiraz, Iran. This study makes use of two Logit models in order to present a unified framework depiciting the factors that seem to affect the developmeht of informal sector activities. The first model looks at those factors affecting one’s choice of hawking as a job, and the second looks at those tactors responsible for the sustenance of hawking in Shiraz. The results of the study show that: 1) unavailability of proper jobs in the formal sector, 2) lack 01 proper skills required to he employed in the formal sector, 3) inadequate income earned in the formal sector; and finally, 4) the indecisiveness of the local authorities towards the Street sellers have led to the sustenance of hawking in Shiraz.