Online Program

Surveying Informal Businesses Using Adaptive Cluster Sampling (308020)

Keywords: Adaptive sampling, Informal enterprises

The informal activity makes up a significant share of economic activity in developing countries, therefore obtaining representative data is a priority for policy-making and analysis. However, due to the nature in which informal (not registered) activity takes place, existing methods of obtaining data has been met with limited success. This presentation introduces a new methodology using stratified Adaptive Cluster Sampling (ACS), which also addresses many of the challenges faced with the 3-step approach to study the informal sector that emerged from the Delhi group. Our proposed approach starts with a random selection of pre-defined number of stratified geographical areas for a full enumeration of all informal businesses in each and is followed by expansions to all adjacent squares if the number of informal firms found in any square is above a pre-defined threshold. This approach allows for more precise estimation of the size of informality, while simultaneously obtaining a representative sub-sample using a survey instrument that measures the performance, characteristics and obstacles that informal businesses face.