Abstract
The paper draws on recent research on the economics of prostitution focussing on the role of stigma in shaping the interaction between demand and supply and the resulting sub-markets in which this activity is typically organised. Here we extend the framework to consider the role of reputation and stigma in determining policy decisions regarding the regulation of prostitution and show how sub-optimal outcomes (from the point of view of the welfare of sex workers) may prevail.
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Notes
For a detailed critique see Della Giusta et al. (2007a).
The sample was taken by distributing a survey to customers of a Sexpo exhibition hold in Melbourne 2001. This is a commercial event hosting a wide range of exhibitors of products associated with sex; of 4,905 respondents, 1,225 received a version of the questionnaires with questions on sex workers. Among 1,225 respondents, 612 were men and 601 were women.
Dispatches: Sex on the Street; Channel 4 season Prostitution–The Laws Don’t Work, Channel 4, September 2002.
Note that we are not assuming any ‘public nuisance’ costs here, as the evidence reviewed by the author on regulated streetwalking areas suggests that the perceived sharp trade-off between safe neighbourhoods and streetwalking is largely a result of mis-representation: well managed street walking zones are overwhelmingly located away from residential areas, which tend instead to become used for soliciting in the absence of regulation (and often in association with repressive regimes). For a discussion of displacement see Collins and Judge (in this issue).
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Acknowledgments
I would like to thank Vanessa Munro and collaborators in the Supply/Demand Dynamic in Prostitution seminars for fruitful discussions, as well as the British Academy and the ESRC for funding the organisation of these meetings.
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Appendix
Appendix
Formally, if the policy maker maximises the following utility function incorporating both its own reputation and public welfare:
where C is a cost function increasing in all its components C (cp, ca, ch) which has an identifiable minimum value, and reputation has a fixed component and a variable component r G reflecting the effect of changing prostitution policy, whose relevance depends on the closeness to election tr G > 0 with 0 < t<1 where t = 1 is election time.
Thus, maximising the policy makers’ utility will require simultaneously maximising reputation and minimising costs, that is satisfying the following:
if elections are far, that is t = 0, then the policy maker will switch to a regime that minimises costs. Conversely, at election time t = 1 and if swing voters are relatively conservative, the policy maker will switch to a regime that increases costs of an amount equal to the reputation increase that the policy maker requires in order to get re-elected.
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Della Giusta, M. Simulating the impact of regulation changes on the market for prostitution services. Eur J Law Econ 29, 1–14 (2010). https://doi.org/10.1007/s10657-009-9105-y
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DOI: https://doi.org/10.1007/s10657-009-9105-y