Measuring the Informal Economy: A Validation Study of the Resource Generating Strategies Scale

Abstract

Objective: This article reports on the reliability and validity of a new instrument called the Resource Generating Strategies (RGS) Scale, which was created to measure participation in the informal economy. Method: Researchers interviewed 285 adult women who had received domestic violence services, were currently incarcerated, or were residing in the community. Results: Five subtypes of informal economic activity are identified: (a) informal selling and exchange, (b) credit card use, (c) institutionalized informal economy, (d) gifts or loans from family and partners, and (e) illegal informal economy. Strong evidence is found for reliability and validity. Conclusions: This scale can be used to expand the knowledge base of practitioners and policy makers about the strengths and economic coping strategies of low-income individuals.

Keywords

instrument development informal economy resource-generating strategies poverty income packaging

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