Quality Upgrading in the Street Food Market: Is Better Equipment and Training Sufficient?

Caitlin Brown and Denni Tommasi

No 25163, RFBerlin Discussion Paper Series from ROCKWOOL Foundation Berlin (RFBerlin)

Abstract: We study quality upgrading in informal street food markets - where food safety is a credence attribute and transactions are frequent, low-value, and weakly regulated - using two linked experiments with consumers and vendors in Kolkata, India. We firstly define and measure upgrading through a context-specific framework based on observable sanitation-related inputs and food-safety practices. Using a discrete choice experiment with consumers, we document a large willingness to pay for visibly cleaner kiosks and more hygienic vendors, highlighting the central role of observable signals. We then conduct a clustered randomized trial with vendors that subsidizes sanitation infrastructure and hygiene supplies, and cross-randomizes on-site training. The intervention increases the use of provided equipment and improves observed hygiene during the subsidy period, but effects fade after support ends and training adds little. Business outcomes improve through higher customer volume yielding increased profits, yet prices do not change. Moreover, untreated vendors near treated peers experience worse outcomes, consistent with demand reallocation and positional returns rather than market expansion. Follow-up surveys and qualitative evidence point to binding constraints from informal price coordination norms and a precarious operating environment, consistent with a moral hazard mechanism in which cleanliness is difficult to verify and not privately profitable to sustain.

Keywords: Quality upgrading; street food; informal markets; food safety; randomized experiment; consumer preferences; hygiene practices; moral hazard; subsidy effectiveness; signaling; developing countries. (search for similar items in EconPapers)
JEL-codes: D82 I18 L15 L31 O12 O33 (search for similar items in EconPapers)
Date: 2025-12
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