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Who is watching? The market for prostitution services

Abstract

This paper presents an economic model of prostitution that differs from the existing literature in that it makes no restrictive assumptions regarding the gender, pay, and nature of forgone earning opportunities of prostitutes and clients, and applies the same behavioural hypotheses to both. Our model gives a central role of stigma and reputation effects to both clients and prostitutes. We discuss demand, supply, and equilibrium results, indicating the possible effects of different policies on the industry and its different markets.

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Notes

  1. 1.

    Power has been incorporated in economic theory by the seminal work of Hirsch (1977), introducing the idea of positional goods. The idea of positional goods is used with reference to power, prestige, status symbol and power asymmetries among members of a household are also widely used in a cooperative and non-cooperative bargaining model of the family.

  2. 2.

    Sex refers to the biological differences between males and females, whereas gender refers to the meaning that a culture gives to such biological difference, constructed on the basis of actual or perceived differences between men and women (Harding 1986; Rubin 1975). Gender relations are, therefore, different in different cultures, and they are not given by nature but socially constructed. Social construction refers to the idea that our identities are shaped through the transmission of values into children from birth in the family, education systems, mass media, etc. These shape our behaviour and values along different dimensions, including class, race, age and gender. Identity is not determined by biology, but by belonging to the social world and relative social positioning, and the power of an actor are likewise socially determined.

  3. 3.

    Sullivan and Simon (1998) find that 17.7% of American males have paid for sex, whereas Cameron and Collins (2003) find that only 4.9% of UK males have done so.

  4. 4.

    ‘Prostitution allows certain powers of command over one person’s body to be exercised by another (O’Connell-Davidson 1998, p.9).

  5. 5.

    Note that a 1, a 3 and a 4 could depend on observed as well as unobserved individual characteristics such that a high status individual may have a higher a 3 than a lower status individual.

  6. 6.

    β1, β2 and β3 are all positive. They may depend on individual characteristics.

  7. 7.

    The demand curve starts at w = a 1 − a 3 + a 4 I c, which is below a 1 − a 3 + a 4 I c − a 33 R c because a 33 is negative.

  8. 8.

    The supply curve starts at w = b 1 + b 11 H p + b 3, which is higher than b 1 + b 11 H p + b 3 + b 33 R p because b 33 is negative.

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Acknowledgement

We gratefully acknowledge the helpful comments and suggestions received from two anonymous referees, Alessandro Cigno, Leif Andreassen, Francesca Bettio, Mark Casson, Graham Crampton, Christopher Flinn, Jane Humphreys, Giulia Garofalo, participants to the 2004 Annual Conference of the European Society for Population Economics, participants to the 2004 Annual Conference of the International Association for Feminist Economics.

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Correspondence to Maria Laura Di Tommaso.

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Responsible editor: Alessandro Cigno

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Giusta, M.D., Di Tommaso, M.L. & Strøm, S. Who is watching? The market for prostitution services. J Popul Econ 22, 501–516 (2009). https://doi.org/10.1007/s00148-007-0136-9

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Keywords

  • Prostitution
  • Gender
  • Reputation

JEL Classification

  • J16
  • J22
  • J23