vi

HOLY CROSS COLLEGE OF CALINAN, INC

DAVAO – BUKIDNON HIGHWAY, CALINAN POBLACION, DAVAO CITY

REGRESSION ANALYSIS ON FACTORS AFFECTING STREET

FOOD VENDORS’ INCOME IN CALINAN POBLACION

Edis, Princes Loi E.

Alo, Ryza Pearl D.
Navarro, Jan Arthur P.
Bulig, Irradhel Leigh G.
Cortes, Irish Gyle C.
Largo, Deame R.

March 2024
 vi

Regression Analysis on Factors Affecting Street Food Vendors’ Income

in Calinan Poblacion

____________________

A Research Paper
Presented to the Faculty of the Basic Education Department
of the Holy Cross College of Calinan, Inc.

______________________

In Partial Fulfillment of the Requirements

in Practical Research 1

By
Edis, Princes Loi E.
Alo, Ryza Pearl D.
Navarro, Jan Arthur P.
Bulig, Irradhel Leigh G.
Cortes, Irish Gyle C.
Largo, Deame R.

March 2024
TABLE OF CONTENTS
 vi

Page

TITLE PAGE i

APPROVAL SHEET ii

ACKNOWLEDGEMENT iii

ABSTRACT v

TABLE OF CONTENTS vi

LIST OF TABLES viii

LIST OF FIGURES ix

CHAPTER 1: INTRODUCTION

Background of the Study 1

Statement of the Problem 4

Hypotheses 5

Review of Related Literature and Studies 5

Theoretical Framework 25

Conceptual Framework 27

Significance of the Study 29

Scope and Limitations 27

Definition of Terms 28

CHAPTER 2: METHODS

Research Design 30

Research Respondents 31

Research Locale 31
 vii

Research Instrument 32

Data Gathering Procedure 32

Ethical Considerations 33

Data Analysis 34

CHAPTER 3: RESULTS AND DISCUSSIONS

Presentation and Discussion/Interpretation of Data 38

CHAPTER 4: CONCLUSIONS AND RECOMMENDATIONS

Conclusions 48

Recommendations 49

REFERENCES 52

APPENDICES

Appendix 1 Letter for Permission 60

Appendix 2 Letter of Request 62

Appendix 3 Letter to the Validator 63

Appendix 4 Validation Sheet 67

Appendix 5 Informed Consent 69

Appendix 6 Survey Questionnaire 71

Appendix 7 Raw Data 73

Appendix 8 Tabulated Results 84

CURRICULUM VITAE 94
viii
 CHAPTER 1
INTRODUCTION

Background of the Study

Street food refers to food and drinks that are made and sold by vendors in public

spaces like streets and other similar places. Street vended food businesses play economic

and social roles in developing countries through provision of employment, availability of

food at affordable prices, and accessibility of a wide range of food choices that suit

different social communities and classes. However, street food vendors encounter

numerous challenges that profoundly impact their income levels. Factors such as inflation

fluctuations and escalating costs of ingredients and permits directly impede profit

margins, making it arduous for vendors to maintain competitive prices while sustaining

their businesses (Nguyen et al., 2020). Additionally, limited access to initial capital

serves as a significant barrier to entry, particularly for marginalized individuals,

hindering their capacity to initiate or expand their businesses (Meagher, 2019). To

effectively address these issues, a comprehensive strategy is necessary, encompassing

measures to alleviate financial barriers, streamline regulatory frameworks, and promote

inclusivity and safety in urban settings, thereby ensuring the economic viability of street

food vendors.

Globally, the study of Gupta (2018), mentions that in countries like India and

Mexico, street vendors often face challenges related to acquiring initial capital to start

their businesses. The lack of access to formal financial institutions and the high interest

rates associated with informal lenders contribute to the difficulties in obtaining sufficient

2
capital for street vendors in these countries. In India, street vendors have limited options

for accessing formal credit, leading many to resort to borrowing from informal sources at

high interest rates. Similarly, in Mexico, street vendors often struggle to secure the initial

capital needed to start their businesses due to the limited availability of affordable credit

options (Gupta, 2018). The inadequate financial support for street vendors in these

countries hinders their ability to expand their businesses and improve their livelihoods.

The research conducted by Solidum (2023), investigated the obstacles

encountered by street food vendors in the Philippines, shedding light on their financial

struggles and low-income status. She also found that vendors typically earn around 500

pesos a day and often support households of four to six members. This suggests that

while street vending offers a source of income and job flexibility, it likely does not

provide Filipinos with a financial security or well-paid livelihood. Additionally, a study

by Hendrimurtajahyo et al. (2014), examined the influence of various factors on the

growth of small and medium enterprises (SMEs). His research shows that the duration of

a business's operations can positively affect its income potential. Studies suggest that

established businesses may have greater access to export opportunities compared to new

businesses, which may increase revenue. This shows how longevity can provide a

business with advantages such as a more developed network and potentially a stronger

brand reputation, which ultimately contributes to higher revenues.

Street vending is rapidly sprouting on major streets in Davao City. However,

their operations are not permanent. Most borrowed money from their relatives or loan

sharks to sustain their day-to-day operations. An entry level street vendor with 1-3 years
3
of experience earns an average salary of ₱186,375.00 per year. On the other end, a senior

level street vendor with 8 years and more of experience earns an average salary of

₱384,713.00 per year (SalaryExpert, 2024). The above vendors developed the style of

rolling their capital in order to continue with their businesses, they did this because they

had no other sources of income. When asked how they utilized their money in business

transactions, they answered: despite their low capital, they still continue with vending

through rolling their capitals. Many reported a loss of income due to struggles covering

their expenses, forcing them to tighten their budget (Aplaon, Paguio, & San Jose, 2016).

Others experienced a loss of customers as they increased the price of their products,

leading to a further decrease in profits. In addition to that, the fear of losing customers

has prevented some vendors from increasing their prices to maintain their profit margins.

Therefore, better pricing and marketing strategies are needed to help street vendors

overcome these challenges caused by inflation (Gonzalez et al., 2023).

The factors that may affect the income of street food vendors vary from one place

to another, thus, this research aims to explore the diverse factors that can impact the

income of street food vendors in Calinan Poblacion in terms of initial capital, gender,

educational level, length of business, and rising prices of raw materials. Furthermore,

determining the impact of the aforementioned factors to the income of the street food

vendors can provide valuable insights to develop strategies and improve the street food

industry as a whole.

4
Statement of the Problem

This research aims to identify the factors affecting a Street food vendor’s income the
most. Specifically, this research sought to answer the following questions:

1. What is the average income of Street food vendors in Calinan Poblacion?

2. What are the factors that affect the Street food vendors’ income?
3. Is there a relationship between the factors and the income of the street food
vendors?
4. Which of the factors greatly affects the street food vendors' income?

5
Hypotheses
Null Hypothesis: There is no significant relationship between the factors and the income
of street food vendors.

Alternative Hypothesis: There is a significant relationship between the factors and the
income of street food vendors.

6
Review of Related Literature

Initial Capital as a Factor Affecting Street Food Vendors’ Income

The impact of the initial investment amount on the earnings of street vendors has

been widely researched in different situations, revealing the significant importance of the

funds they start with in determining the financial sustainability of their businesses. Initial

capital serves as the cornerstone for street vendors’ business operations, encompassing

essential expenses such as equipment procurement, inventory acquisition, permit fees,

and initial marketing efforts. Street vendors with adequate initial capital can effectively

establish their businesses, positioning themselves for sustainable income generation.

Moreover, sufficient initial capital provides street vendors with the flexibility to expand

and diversify their offerings, catering to diverse consumer preferences and capitalizing on

emerging market trends. This diversification enhances their competitiveness and appeal,

thereby increasing their income-generating potential (Handoyo & Wijayanti, 2021).

Furthermore, higher initial capital empowers street vendors to prioritize quality

enhancement and presentation of their products, as highlighted in Marliati’s (2020) study.

Vendors can invest in fresher and higher-quality ingredients, improving the taste and

appeal of their offerings, while also enhancing packaging and presentation techniques to

drive customer satisfaction and loyalty (Marliati, 2020).

In the study by Setyaningsih, Sukiman, and Widayaningsih (2019), researchers

examined the impact of initial capital on street vendors’ earnings. Their findings revealed

that vendors with higher initial incomes generally made more money, indicating that a

street vendor’s earning potential is largely determined by their starting capital.

7
Additionally, the study showed that vendors with larger initial capital experienced greater

success in growing their businesses and attracting customers, resulting In increased

revenue. This underscores the importance of sufficient funds when starting a street

vending business to sustain and expand it, thereby boosting earnings. Policymakers and

stakeholders should prioritize providing street vendors with adequate initial capital to

improve their standard of living and foster local economic development (Sukiman et al.,

2019). Similarly, in 2017, Adhikari and their team conducted a study about street vendors

in Nepal to investigate factors influencing their income levels. They found that having

enough money to start with is crucial for vendors to earn more money, as it enables them

to establish and expand their businesses effectively. Moreover, the study identified other

factors such as the number of employees working for the vendor and their level of

education as additional determinants of income. This highlights the multifaceted nature of

income generation among street vendors, where access to sufficient starting capital is just

one aspect. The findings emphasize the importance of comprehensive support measures

from governments and other stakeholders to ensure equitable opportunities for street

vendors to improve their livelihoods (Adhikari et al., 2017).

The relationship between Initial capital and business income within urban

informal economies, exemplified by street vendors, is a subject of significant scholarly

interest. Martinez et al. (2017) provide valuable insights into this dynamic through their

study on street vendors in Cali, Colombia, emphasizing how the initial capital

endowment profoundly influences vendors’ income trajectories by enabling them to

procure inventory, secure vending spaces, and invest in marketing efforts. Vendors with

8
higher initial capital demonstrate greater resilience and adaptability to market dynamics,

resulting in higher income levels compared to their resource-constrained counterparts.

However, disparities in capital access exacerbate income inequalities, perpetuating cycles

of poverty and socio-economic exclusion among marginalized groups. These challenges

are further emphasized by Syamsir’s (2016) study on marginalized communities,

specifically street vendors, highlighting the critical role of initial capital in shaping

income levels. With sufficient initial capital, street vendors can not only establish their

businesses but also adapt to market dynamics, diversify product offerings, and attract a

broader customer base, all of which contribute to increased income generation. These

findings collectively underscore the importance of addressing capital constraints and

implementing supportive policies to empower marginalized entrepreneurs and foster

economic inclusivity in urban environments.

The Length of the Business as a Factor Affecting Street Food Vendors’ Income
According to Sukiman et al. (2019), the duration a vendor has been operating

matters. Established vendors often build a loyal customer base and gain experience in

managing their business. The length of the business will have an impact on the revenue

because it will give professional knowledge in the industry and enable more effective and

efficient business operations, which can ultimately result in lower operating expenses. An

actor in the business will get a better understanding of customer preferences the longer

the company is in operation. This is in line with the findings of research by Setiaji and

Fatuniah (2018) and Rani (2019), who came to the conclusion that a person's or

company's income will be impacted by the longevity of their operation.

9
 Street vendors organize themselves locally around different location to operate

their businesses. The length of business or the number of years in the making usually

encountered various set of conditions (specially competing against other street vendors)

which affects the status of productivity whether in a small or a big business industry.

Nevertheless, there are some literatures on the factors affecting income level of street

vendors in developing countries. A study conducted by Setyaninghsih et al. (2019) that

the length of business is one of the variables that has significant effect on the income

level of street vendors. This means that the longer they run a trading business, the greater

their net income. In addition to improving vending experience and skills, the length of

business indicates trader’s vendor’s survivability in a market. Businesses that can survive

in a market can be said to have been efficient and inefficient businesses is unable to

compete and will eventually leave the market. The leaving of business competitors from

this market can increase the market share of the surviving businesses.

Moreover, this explains that from the time an entrepreneur has been in business, it

will affect his professionalism. The more professional skills and abilities in the trade, the

more successful business relationships will attract customers. Per Wibowo et al. (2021),

an increase in the number of customers results in a corresponding rise in sales, thus

leading to an increase in income. Therefore, a street food vendor's income might vary

greatly depending on how long they have been in business. At first, it could be difficult

for new sellers to build a devoted client and a steady stream of income. On the other

hand, seasoned suppliers typically gain more client loyalty with time. In addition,

experienced suppliers frequently acquire knowledge about customer preferences, which

10
helps them better adjust to shifting market trends. In general, a street food vendor has a

better chance of creating a steady source of income the longer they have been in

operation.

Gender of Street Food Vendors as a Factor Affecting their Income

As Chiniara (2023) explained, the concept of gender is acknowledged as a means

to describe the psychophysiological mechanisms related to identity and societal function

of an individual. It is determined by an individual's self-identification as male, female, or

another gender identity. Additionally, it can be influenced by legal status, social

interactions, public presentation, personal experiences, and psychological context. The

role of gender became a crucial aspect of urban informality, with women's engagement in

informal employment and caregiving responsibilities within informal settlements served

as a reflection of the realities of informality. Women working in the informal sector face

a multitude of challenges, including health and safety hazards, perilous working

environments, gender-based violence, uncompensated reproductive labor, and various

constraints related to time and space while carrying out their tasks (Akella, 2014;

Reinecke et al., 2019).

These areas offer uncertain employment conditions, minimal or irregular wages,

limited access to social protections, and scant opportunities for organizing to uphold

international labor standards and human rights. The employment situation for many

women workers is characterized by poor quality jobs lacking in skill development and

opportunities. Their increased participation in the informal sector is primarily driven by

economic necessity rather than a shift in work culture. Women often enter street vending

11
due to poverty, compelled to support themselves and their families. Various factors such

as lack of skills, limited education, family breakdown, unemployment of spouses,

domestic violence, and familial pressure contribute to their engagement in street vending.

Research conducted by National Association of Street Vendors of India indicates that

women vendors earn less than men for the reasons that they came from economically

disadvantaged backgrounds with limited resources for business investment, and they have

additional responsibilities at home which reduce their working hours (Janagam, 2023).

Moreover, Njaya & Murangwa (2016), reported that women engaged in street

vending encounter increased risks, particularly operating in insecure and unauthorized

locations, making them vulnerable to eviction and confiscation of their merchandise,

which directly impacts their daily sales. Njaya (2016), also presented in a study he

conducted that female street vendors experienced lower sales and consequently lower

daily incomes due to several factors. They typically sold items that demanded minimal

initial investment, focusing primarily on working capital. Many women traded in low-

volume and perishable goods like vegetables, fruits, and cooked food, which often

yielded less profit. Additionally, female vendors had limited access to productive tools

and financial resources, often working as commission agents or employees for other

vendors.

Educational Level of Street Food Vendors as a Factor Affecting their Income

The education level has a noticeable impact on the increase in income. It implies

that individuals with higher levels of education will have more opportunities to earn large

sums of money (R. A. Wulantari and Armansyah, 2018)

12
 A research article by Akwasi et al. (2020) found that street food vendors are

generally educated up to at least the primary level, indicating a basic level of education

among this group. However, the lack of resources and formal training hinders the

practical application of food safety practices despite their awareness. This suggests that

education plays a crucial role in shaping the income levels of street food vendors, with

higher education potentially leading to increased earnings and better financial stability in

the street food vending sector.

Additionally, Martínez and Rivera-Acevedo (2018) found that, on average, street

vendors are less educated than the general public in the city. The distinction between

vendors with low educational background and those with higher formal education has

further been highlighted in some other studies. For instance, Martínez et al. (2018) argue

that street vendors from Downtown (established sector, better working conditions) have

higher educational attainment than their counterparts in the market, such as those in the

entry sector/gateway for the less educated, recent rural migrants. Educational levels are

positively linked with estimated profits. Thus, it is further outlined that policy

interventions must consider such diversity and segmentation of street vending that vary

spatially. In another study, Osei Mensah et al. (2018) find that vendors with low or no

formal educational background are less likely to appreciate the benefits of business

management training and, as such, less likely to participate than their counterparts with

higher formal education.

Research across various sectors consistently demonstrates a positive correlation

between education level and income. For instance, a study by Psacharopoulos and

Patrinos (2018) conducted a review of global literature on returns to investment in

13
education and found that higher levels of education are associated with higher earning

potential. This relationship suggests that education equips individuals with skills and

knowledge that enhance their productivity and enables them to access higher-paying jobs.

A study by Rebouças et al. (2017) indicates that completion of secondary

education, college, or university training may imply better food safety practices among

street food vendors. This is because formal schooling can contribute to increased

knowledge and understanding of food safety principles. Additionally, Ma et al. (2019)

suggest that higher levels of education generally correlate with higher levels of food

hygiene and safety knowledge. However, the findings of Ma et al. (2019) regarding street

food vendors in Handan, China, paint a different picture. They report that a majority of

the street food vendors in this area have low levels of education, with many being either

illiterate or having only attained primary or middle school education. This disparity

between the expected correlation of education level and food safety knowledge among

street food vendors suggests that there may be other factors at play.

Inflation as a Factor Affecting Street Food Vendors’ Income

Inflation poses a challenge worldwide as highlighted by the International

Monetary Fund (IMF) with certain nations facing more severe inflationary pressures, than

others. Emerging markets are particularly affected by inflation rates in comparison, to

advanced economies. (Hrisca, 2022). As well as that, inflation refers to the continuous

rise in the general price level of goods and services over time. It cannot be measured by a

rise in the cost of a single product or service but rather reflects the overall trend in prices

(Federal Reserve System of United States, 2016). Moreover, inflation affects businesses

in many ways leading to prices, for materials and goods impacting small business

14
earnings and necessitating price hikes and staff reductions. During periods service costs

also increase along with energy, shipping, and borrowing expenses.. Small business

owners may face lower-than-expected profits and higher expenses and be forced to make

tough decisions to keep their businesses afloat. (Kane, 2022).

A study conducted by Sulistiyono (2019), revealed that inflation has a negative

effect on the number of Micro, Small, and Medium Enterprises (MSME) players in

Sukoharjo Regency. This means that a higher inflation rate results in a decrease in the

number of enterprise players. Meanwhile, small businesses are facing financial strain due

to rising costs, which are expected to continue as they struggle to manage the increasing

costs.

It is believed that inflation has an impact on street vendors, who are individuals

selling goods or services on the streets, mainly in urban areas (Ordinario, 2021).

Furthermore, Zhu and Simarmata (2015) suggest that inflation can lead to shortages of

certain goods, which can make it difficult for vendors to find the products they need to

sell. As a result, inflation has a significant impact on the income of street vendors. As

prices of goods and services rise due to inflation, street vendors may have to increase the

prices of their products to maintain their profit margin. However, if customers are unable

or unwilling to pay the higher prices, street vendors may experience a decrease in sales,

resulting in a decline in their income.

According to the Philippine Statistics Authority, the inflation rate in the

Philippines rose from 2.1% in May 2020 to 4.5% in May 2021, which is an increase of

15
over 100%. Out of the six provinces, only Biliran, Eastern Samar, and Samar recorded an

increase in inflation rates in August 2022 at 7.9%, 7.2%, and 6.8%, respectively. The rise

in inflation has adversely affected many businesses, from small enterprises to big

companies, including street vendors in Calbayog. In particular, inflation rates in the

Philippines have increased, causing concern for businesses and consumers. In addition,

inflation makes investment doubtful for both domestic and foreign investors. Also, it

destroys the terms of trade in the country by increasing the price of domestic goods more

than the regional and world market prices. It’s very difficult to accept or adapt Street

vendors in the Waaheen market to the changing price of commodities because they sell

the cheapest commodities that are not possible to raise the price. Inflation originated from

four major factors demand-side factors, monetary factors, supply-side factors, and

external factors (Osman, 2019).

16
Theoretical Framework

This study is anchored to the following theories namely Resource-Based Theory

and Human Capital Theory. The Resource-Based Theory as proposed by Barney (1991),

when applied to street food vendors, underscores the strategic importance of leveraging

unique resources to gain a competitive edge in the market. For these vendors, physical

capital resources such as cooking equipment, ingredients, and mobile units play a pivotal

role in offering distinct food options and enhancing operational efficiency. Moreover,

human capital resources, including culinary expertise, creativity, and customer service

skills, contribute significantly to the quality of food and overall customer experience.

Additionally, organizational capital resources such as effective inventory management,

pricing strategies, and teamwork are essential for optimizing operations and adapting to

changing market demands. By effectively harnessing these resources, street food vendors

can establish themselves as leaders in their niche, attracting and retaining customers

while outperforming competitors.

The Human Capital Theory initially proposed by economists Gary Becker and

Theodore Schultz in the 1960s, posits that individuals can improve their economic

productivity and enhance their earning potential through investments in education,

training, and other forms of skill development. In essence, human capital refers to the

knowledge, skills, experience, and attributes possessed by individuals that contribute to

their productivity and economic value. According to this theory, individuals who invest

in acquiring and improving their human capital are more likely to secure higher-paying

17
jobs and enjoy greater career advancement opportunities. Human Capital Theory has

significant implications for various aspects of society, including education policy,

workforce development initiatives, and labor market dynamics, as it emphasizes the

importance of investing in human potential to drive economic growth and individual

prosperity (Becker, 1964).

These theories emphasize the importance of identifying and maximizing the value

of physical capital resources, human capital resources, and organizational capital

resources. Street food vendors can use this framework to assess their strengths and

weaknesses, identify areas for improvement, and develop strategies to differentiate

themselves from competitors. Furthermore, providing training and development

opportunities for themselves, vendors can enhance their culinary skills, customer service

abilities, and business acumen. Additionally, vendors who prioritize education and skill

development may be better equipped to adapt to changing market conditions, innovate

new recipes, and effectively manage their businesses. Ultimately, Human Capital Theory

underscores the importance of continuous learning and skill enhancement for street food

vendors to succeed in a competitive market environment.

18
Conceptual Framework

Figure 1. Conceptual Framework of the Study

Independent Variable Dependent

Variable

Initial Capital

Gender

Educational Level
Street Food Vendors’ Income
Length of Business

Inflation

Figure 1 presents the conceptual framework of the study. The initial capital,

gender, educational level, length of business, and inflation are the independent variables

of the study and the income of street food vendors is the dependent variable.

In figure 1, initial capital as an independent variable pertains to the financial

resources invested in starting a business. The gender of the vendor, a biological and

social characteristic, influences income through factors like resource access, societal

expectations, discrimination, and market opportunities (Gupta & Singh, 2020).

Additionally, educational level indicates the highest educational attainment of a vendor.

Furthermore, the length of time a street food vendor has been in business reflects their

experience, market knowledge, and establishment within the industry. Longer tenure may

19
signify established customer bases, refined operational efficiencies, and adaptation to

market changes (Sukiman, et al. 2019). Lastly, inflation can squeeze the income of street

food vendors by increasing costs, affecting consumer spending, and creating business

uncertainties. These challenges highlight the resilience and adaptability required by

vendors to navigate economic fluctuations (Yu, 2022).

The dependent variable of this research is the income of the street food vendors. It

refers to the total revenue generated by the vendor from selling food items on the street

within a specific time frame, usually measured annually or monthly (Johnson, et al.

2018).

Significance of the Study

The findings of this research will be of great use to the current street vendors as it

will impart knowledge and ideas in order for them to put preventive measures on the

factors that affect their business income.

The data gathered can be utilized by the Department of Interior and Local

Government as inputs in planning and enhancing existing policies related to street

vendors. They can use the data to create a business plan and strategies to help the street

vendors. It serves as a basis for the factors that affect the income of street food vendors in

their area and a reminder that they should continually monitor these vendors if their

earnings are still flexible to them

20
 The data will be a great use to future street vendors. This can serve as a basis in

terms of creating a business plan and strategies to help them be better equipped in starting

their future street food business. Furthermore, it can be used by future researchers as

basis and reference. They can also use the variables that the researchers used in this

research.

21
Scope and Limitations

Definition of Terms

Street Vending - refers to the selling of goods or services by individuals or small

businesses on public streets, sidewalks, or other outdoor areas. It often involves the direct

interaction between vendors and customers in a casual, non-traditional retail setting.

Marketing Strategy - stimulate interest in specific products or brands without directly

promoting any brand.

Competitive Pricing - is the process of selecting strategic price points to best take

advantage of a product or service-based market relative to competition.

Income Status - the position of a person or household's income in relation to a low-

income line.

Profit Margins - measures how much of each dollar earned by a company translates into

profit after accounting for all expenses, such as cost of goods sold, operating expenses,

taxes, and interest.

Regression analysis - is a way of mathematically sorting out which of those variables

does indeed have an impact.

22
23