The Economics Of Prostitutes

August 10, 2014 in Daily Bulletin

The Economist took an exhaustive look at the sex industry. In particular they analyzed at the factors that affect supply and demand:

  • Prices vary with the type of services provided – those who are willing to have sex with multiple individuals at the same time can make the most.
  • They also vary with the physical attributes of the seller. Blonde women with long hair who are described as athletic and have at least a D have the highest earnings.
  • In fact breast implants will make sense for many flat chested prostitutes who can upgrade to a D cup for $3,700. This will boost hourly wages by about $40 and pay for itself after 90 hours.
  • Just like in other job markets having a degree boosts wages as well – likely because educated prostitutes have clients that are paying for longer, more intimate sessions, rather than just sex.

Then the news magazine delved into why hourly rates for prostitutes have tumbled:

  • They have decreased by close to $100 an hour, and the global financial crisis explains at least some of that.
  • Migration which has led to an influx of lower earning sex workers has also brought down prices.
  • The rise of the internet has allowed more women to get into the trade more discretely further boosting supply.
  • While demand has likely decreased – free sex is easier to find than ever before with apps such as Tinder, and the ease with which couples can get divorces means there are fewer sexually frustrated marriages.
  • The internet has moderated the effects of demand shocks. During the 2008 Democratic and Republican national conventions an influx of prostitutes to the cities where they were held limited price increases.

Read more details, see visualizations of the data, and find out why The Economist ultimately supports legalizing prostitution over here.

Source: The Economist