by Alfonso Morales, University of Arizona <morales@aruba.ccit.arizona.edu>; Steven Balkin, Roosevelt University <mar@interaccess.com>; Joseph Persky, University of Illinois at Chicago <U09102@uicvm.uic.edu>.
Excerpts from the article which appeared in Economic Development Quarterly, November 1995, p. 304-330. Provided through OPENAIR-MARKET NET.
Abstract
Chicago's Maxwell Street Market was among the oldest open-air public markets in the United States. The market was closed in August 1994 and a smaller alternative was opened on Canal Street. This article estimates monetary losses resulting from the closure of the market. First, the authors briefly discuss the market's history, followed by a review of the literature on the informal economy. The problem of quantifying the value of street vending is addressed by combining ethnographic and economic analytical methods. Ethnography is introduced in the article's third section. The authors demonstrate the usefulness of merging 'ethnographic' and economic analysis by estimating monetary losses to vendors and consumers as a result of changes in the market's governance and location.
Authors' Summary and Conclusion
Our discussion of lost benefits pointed out the intricate relationships that intersect in activities as old and complex as street vending at the market. Future investigations must grapple carefully with both measured and unmeasured elements; only by specifying and testing for potential connections can we determine the importance and interdependence of such interlinked components.
The elimination of the Maxwell Street Market imposes a cost on users of at least $35.2 million (see Table 5). Adding to indirect nonuser losses from reduced spending of the vendors (the multiplier effect) brings the total estimate to $49.3 million. The Maxwell Street Market involved 850+ vendors selling to 20,000 shoppers at peak times of the year. Variation in both seasonal use and types of vendors was taken into account, as well as the stream of losses over time, discounted to the present.
Eleven different categories of loss were discussed: lost vendor income, lost consumer benefits, adverse multiplier effects from lost vendor income, fewer businesses started, lost jobs from fewer businesses incubated, fewer entrepreneurial role models, interruption in cultural continuity, increased criminal justice expenditure, lost tourist revenue, loss of historical sites, and lost university benefits. Losses were, however, estimated from only three of these categories: lost income to vendors, indirect lost income from the multiplier effect, and lost benefits to shoppers. Therefore, such estimates undercount the costs imposed by the market's closing, since several loss categories have not yet been estimated.
Literature reviewed indicates the absence of systematic empirical work on the range of informal U.S. sales activities. The gap between macroeconomic estimates of unreported income and empirical research on income-earning activities is wide - and only initially addressed by this research. However, our findings are consistent with arguments regarding the economic importance of the informal sector. The Maxwell Street Market served an important economic and social function; its closing amounted to a substantial loss imposed upon some segments of society least able to afford it. Public policy concerning the informal economy, and the phenomena of street markets in general, warrant serious and deliberative attention.
This article created some controversy. It was given the subtitle, "FORUM: Controversy on Maxwell Street."
"We (Editors of Economic Development Quarterly) believe that the debate that has taken place between the authors and reviewers is of such importance that we have then solicited people to comment on the article. Controversy on Maxwell Street raises the issue of the marriage of anthropologic and economic techniques in economic development analysis." - Editors of Economic Development Quarterly (p.304).
Two critical responses were published in the same issue.
Response: The Use of Economic Anthropology in Economic Development by Rhoda Halperin (pp. 321-322)
Response: The Use of Economic Analysis in Public Policy by Wim Wiewel (pp. 324-326).
(We agree with some but not all of the points in the Responses. - Morales, et.al.).
Excerpts from Authors' Response to Critics:
"Rejoinder: Contradictions and irony in Policy Research." (pp. 327-330)