Working paper // World Institute for Development Economics Research 2011,11
Unlike in most Latin American cities, street vendors organized in farmers' markets popularly known as ferias libres in Santiago de Chile, gained legal recognition early in the twentieth century. Since then, comunas, or local municipalities, have provided vendors with individual licenses that stipulate the place and time of operations, and have defined a clear set of rules regarding customer service. However, this early legal recognition has not necessarily overcome the embedded conflict over the economic use of public space. As supermarkets become spatially positioned along the main streets within easy access of the city's transportation system, feriantes, or licensed street vendors, are being relocated in less profitable areas. Moreover, coleros, or unlicensed vendors, are still flourishing despite efforts to restrict their numbers.This paper argues that the current regulations regarding ferias promote market segmentation that is detrimental to both municipal control and ferias' competitiveness. An analysis of their spatial distribution within the city identifies two key elements: (i) the probability of a feria being located in a particular neighbourhood is sensitive to the patterns of residential socioeconomic segregation experienced by the lower socioeconomic status households, and (ii) the number of unlicensed vendors decreases drastically in relation to the licensed vendors within the less segregated neighbourhoods. These results suggest that a more cautious allocation criteria may promote greater control for the comunas while preventing further market segmentation and stigmatization of the ferias.