of informal businesses in certain areas. It is not designed to capture these informal businesses in their place of operation. As such, policy-relevant information such as the characteristics of these businesses, information on sales, expenditures, investment, competition, and the interaction with the business environment is de-linked from where these activities take place (with exceptions in household-based businesses). So-called 1-2 methods, where a second module following the household module is administered to an informal business/activity, implement a business-level survey module at the place of business, avoiding this last problem. However, such surveys are still limited to the representativeness of L .<sup>11</sup> A second approach is the establishment survey or census, which may include informal LL NN businesses. In the case of an establishment (or economic) census, all units are selected with certainty, removing a multi-stage framework. By contrast, an establishment survey requires a suitable sampling frame, where each unit in that frame exists within the universe of applicable businesses; call this . In certain cases, they may come from an economic census, but they are infrequent and tend to exclude legally informal businesses.EELL<sup>12</sup> Accurate projections of informal UU business activity also require credible estimates of i i i missing from censuses and administrative counts. In the absence of such adequate frames, EELL,i<sup>, which, virtually by definition, are</sup> UU implementers usually construct a frame through a two-stage process, where an area (PSU, ) is first enumerated to generate a frame, and then a selection of informal businesses are selected in EELL ii∈NN a second stage.<sup>13</sup> However, constructing such a frame is often intensely costly in terms of time and effort, particularly if implementers lack _a priori_ information on the location of informal businesses.

This paper proposes a specific solution to address the implied time, effort, and cost developing such geographically based estimates and sampling frames: namely, we propose that survey implementers use a sampling method designed to adapt and more intensively sample areas where informal businesses are discovered. To do this, we use a sampling method known as Adaptive Cluster Sampling (ACS) (see Thompson, 1990).<sup>14</sup> ACS is a method of essentially guided sampling, where the discovery of informal businesses ( ) in a PSU ( ) triggers more 11 Note that in these cases informal businesses are a tertiary sampling unit (TSU), where even if those businesses are jj ∈ UU ii ∈NN

> 11 Note that in these cases informal businesses are a tertiary sampling unit (TSU), where even if those businesses are selected with certainty, unit non-response will result in three-stage weighting.

> 12 India’s Economic Census and Rwanda’s Establishment Census are two notable exceptions that include informal businesses.

> 13 An example of this approach is the survey of informal businesses in townships in South Africa conducted by Sustainable Livelihood Foundation (http://livelihoods.org.za/).

> 14 The use of ACS to measure informal business activity has been piloted by the World Bank’s Enterprise Analysis Unit (DECEA) for several years, following an initial pilot of the method in Harare, Zimbabwe (2016/17).

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