Bobcat

Economics Of Sex

22 posts in this topic

The wiser and better educated members of Punternet might like to have a read of this article:

http://bigthink.com/ideas/39619

Perhaps you could discuss it's implications or explain it for the rest of us?

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Its certainly an imaginative way of teaching how the economics of markets work.

However I think most punters and sex workers have worked out for themselves what are the various forces that impact on their activity and the prices that are paid/charged.

The paid sex market, though, is a good field to use by way of example for the study of economic markets since the forces at work are as legion as is the variety of services which are traded.

One impact here in the UK which I have noticed is the way that prices have remained stable for the last two or three years which to my mind clearly reflects the 'tightness' in the economy presently.

Uncle Pokey

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one oddity in sex work is that wg's often have a floor price below which they will not work. This is in contrast with the model described when people will decrease their price in order to get work.

I think this is unique to sex work because of the special nature and intimacy of the work.

I am not criticising girls for having a ceiling price here, just saying it is a distortion of the simple model described in the article)

one other oddity is people who will pay more than the market price for something thinking they are getting better quality. Which is why people buy M&S spuds which are available from a market stall nearby for a fraction of the price. And why blokes engage £300/hr wg's when a £120/hr one will do as good a service.

Edited by Coventrypunter

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one oddity in sex work is that wg's often have a floor price below which they will not work. This is in contrast with the model described when people will decrease their price in order to get work.

I think this is unique to sex work because of the special nature and intimacy of the work.

There was a supermodel who was famous for saying she "wouldn't get out of bed for less that £xxxxx" wasn't there? I guess for WGs it's the opposite LOL.

I don't think WGs are that in having a price below which you just feel that people aren't treating you with any respect.

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one oddity in sex work is that wg's often have a floor price below which they will not work. This is in contrast with the model described when people will decrease their price in order to get work.

I think this is unique to sex work because of the special nature and intimacy of the work.

Don't agree, the same floor applies to all sorts of markets, a very large number of tradesmen for example have a daily rate which they will not drop below. They would rather not work than take what they felt was less than a 'fair' wage. The strange thing is that this daily rate is different when subcontracting for a builder or working directly for a homeowner. They will take less from a builder, or a huge number will, not all of course.

Also the level of state benefits distorts the floor price below which people will not drop.

The article is very interesting but doesn't mention how the legal situation (or defacto situation in a particular location) distorts the market. If brothels were shut down in (for example) Milton Keynes, would that put the indie price up or not? I'm not sure, though I suspect prices would rise.

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Interesting article.

There is possibly a case for a "shout out" to punternet on that blog as well.

A key tenet of the theory of perfect competition is that markets work best (i.e. are most efficient) when there is perfect information -- i.e. buyers and sellers each have the same information, in particular about (a) the availability of alternatives, and (B ) the price of alternatives.

This is the biggest argument, for example, in the government regulation of medical and pharmaceutical industries, as doctors and chemists have information and knowledge that patients cannot hope to have so unregulated trade between buyers and sellers of those services would not lead to an optimal result (basically, we would all be prescribed procedures we don't need and drugs we don't want).

In the pre-Internet / pre-punternet days, service providers had all of the information and punters (I presume) were stuck with a trial-and-error approach, relying on phony pictures in telephone boxes and/or whatever flattering description the receptionist cared to give you. By contrast, the breadth and anonymity of the Internet has allowed punters to share experiences and therefore gather a wealth of information on a particular girl or establishment before booking a visit. This must have had an influence on pricing (though it would be interesting to hear the experience of WGs who have worked throughout the growth of PN), because an establishment or an Independent could not systematically rip off customers indefinitely with phony pictures and descriptions before the reviews catch up to them.

In effect, this is a great example of how "perfect information" levels the playing field between buyers and sellers and leads to more efficient pricing.

Well done Punternet. Adam Smith would approve!

Mark

Edited by Mark Felt

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Interesting article.

There is possibly a case for a "shout out" to punternet on that blog as well.

A key tenet of the theory of perfect competition is that markets work best (i.e. are most efficient) when there is perfect information -- i.e. buyers and sellers each have the same information, in particular about (a) the availability of alternatives, and (B ) the price of alternatives.

This is the biggest argument, for example, in the government regulation of medical and pharmaceutical industries, as doctors and chemists have information and knowledge that patients cannot hope to have so unregulated trade between buyers and sellers of those services would not lead to an optimal result (basically, we would all be prescribed procedures we don't need and drugs we don't want).

In the pre-Internet / pre-punternet days, service providers had all of the information and punters (I presume) were stuck with a trial-and-error approach, relying on phony pictures in telephone boxes and/or whatever flattering description the receptionist cared to give you. By contrast, the breadth and anonymity of the Internet has allowed punters to share experiences and therefore gather a wealth of information on a particular girl or establishment before booking a visit. This must have had an influence on pricing (though it would be interesting to hear the experience of WGs who have worked throughout the growth of PN), because an establishment or an Independent could not systematically rip off customers indefinitely with phony pictures and descriptions before the reviews catch up to them.

In effect, this is a great example of how "perfect information" levels the playing field between buyers and sellers and leads to more efficient pricing.

Well done Punternet. Adam Smith would approve!

Mark

I charge what I charge because I feel I am worth that, and because I can. No more - no less - than that. You could say I charge it because I am busy and don't want to see too mnay people, or you could say I want to cut out a chunk of the market, and you could say lots of things but none of it is true.

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I charge what I charge because I feel I am worth that, and because I can. No more - no less - than that. You could say I charge it because I am busy and don't want to see too mnay people, or you could say I want to cut out a chunk of the market, and you could say lots of things but none of it is true.

I'm not that sure that what I said was actually inconsistent with what you've said.

Implicit in the idea that you charge what you feel you are "worth" and the idea that you can charge what you "can" is the fact that you must have some frame of reference for coming up with a number. It doesn't matter whether you arrived at that number through exhaustive trial-and-error, through painstaking market research, or simply by chance or by instinct. However you did it, you chose to charge £x ph as opposed to £y ph.

Likewise, buyers have to make similar judgements about how much they are willing to pay for particular services, by particular types of girls and for particular durations. I.e. we need to work out for ourselves what we think each experience is "worth" and -- by reference to our bank accounts -- what we "can" afford to pay.

All I am saying is that pre-Internet and pre-punternet, there was imperfect information. After all, even back then you KNEW what you look like and how good you are at your job, but I didn't -- not until I made the decision to see you. Also, there is a good chance that you see more punters than I see WGs. So you would have developed a better instinct than I would have about what that experience was worth, you'd do it faster and you'd be earning money while doing it. Meanwhile, on the assumption that -- in those days -- punters rarely interacted with one another, it might take a lot longer and some costly trial-and-error me to come to the exact same conclusion.

By contrast, with the benefit of punternet and other forums, the amount of information that buyers and sellers have is much more balanced, so we can both arrive at our own judgements in a faster and more efficient way. I can visit your website, I can read reviews, I can chat to other customers and form a more precise view about what I think the experience is worth and, with any luck, my view will be the same as yours and we're off to the races. But even if it doesn't, that's no big deal -- there is no shortage of suppliers for me and no shortage of customers for you.

All I am saying is that there is now greater likelihood now that customers are finding their way to WGs that are suited to them (in terms of price, service, quality, etc.) than there was before we had the benefit of PN.

I should stress that none of this is meant to be a normative judgement on whether WGs generally or any one in particular charge "too much" or "too little". You charge what you charge for whatever reasons you choose. Returning to the subject of the thread, economics is supposed to enquire about WHY you choose to charge what you charge -- it is NOT suppposed to conjure a theory and then suggest that you should charge something else.

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Amusing article but I don't think it can be lauded.with any more praise than being an attention grabbing way to teach economics which is to be fair how the author describes the piece.

Problem with applying the basic economic model to sex is the model is based on a series of assumptions which I think are particularly inappropriate for punting, the key assumptions of the model being

1) homogenous goods/services - using the articles terminology can you really ever say one trick is the equivalent of another. Punts have a very high number of factors (services provided, expertise, looks) that make punts less easily comparable than say other services. And that's before you get onto whether you and the WG clicked

2) competitive (large number of suppliers and customers with little cooperation, low barriers to entry etc) - ok there are agencies but on the whole this is probably true in punting (unless anyone knows of any cartels out there?)

3) perfect information - this means the customer is able to know about and accurately compare all services on offer and prices before making a choice. No amount of research gives you full assurance of how a puny will be so this is definitely an assymetric market (been some interesting studies on them lately so perhaps they would provide.a useful model for punting)

4) rational agents (suppliers and customers) - I think this is the killer for why the model wouldn't work here. First the kind of rationality the model assumes has been shown to have weaknesses generally but when you're looking at a topic as emotive as sex I can't believe anyone could claim we act rationally. For example, after having received a service we should be temporarily sated though several people reprt punting back to back, leads on to some reporting an element of addiction to punting.

Anyway those are my thoughts. A nice way of teaching but not really very applicable

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I'm not that sure that what I said was actually inconsistent with what you've said.

Implicit in the idea that you charge what you feel you are "worth" and the idea that you can charge what you "can" is the fact that you must have some frame of reference for coming up with a number. It doesn't matter whether you arrived at that number through exhaustive trial-and-error, through painstaking market research, or simply by chance or by instinct. However you did it, you chose to charge £x ph as opposed to £y ph.

Likewise, buyers have to make similar judgements about how much they are willing to pay for particular services, by particular types of girls and for particular durations. I.e. we need to work out for ourselves what we think each experience is "worth" and -- by reference to our bank accounts -- what we "can" afford to pay.

All I am saying is that pre-Internet and pre-punternet, there was imperfect information. After all, even back then you KNEW what you look like and how good you are at your job, but I didn't -- not until I made the decision to see you. Also, there is a good chance that you see more punters than I see WGs. So you would have developed a better instinct than I would have about what that experience was worth, you'd do it faster and you'd be earning money while doing it. Meanwhile, on the assumption that -- in those days -- punters rarely interacted with one another, it might take a lot longer and some costly trial-and-error me to come to the exact same conclusion.

By contrast, with the benefit of punternet and other forums, the amount of information that buyers and sellers have is much more balanced, so we can both arrive at our own judgements in a faster and more efficient way. I can visit your website, I can read reviews, I can chat to other customers and form a more precise view about what I think the experience is worth and, with any luck, my view will be the same as yours and we're off to the races. But even if it doesn't, that's no big deal -- there is no shortage of suppliers for me and no shortage of customers for you.

All I am saying is that there is now greater likelihood now that customers are finding their way to WGs that are suited to them (in terms of price, service, quality, etc.) than there was before we had the benefit of PN.

I should stress that none of this is meant to be a normative judgement on whether WGs generally or any one in particular charge "too much" or "too little". You charge what you charge for whatever reasons you choose. Returning to the subject of the thread, economics is supposed to enquire about WHY you choose to charge what you charge -- it is NOT suppposed to conjure a theory and then suggest that you should charge something else.

I used to work for an agency back in the day. They charged £130 for the hour and took half of the money. They started to raise their fees to £150 to new clients only.

When I left I used that figure as my hourly rate. When I became well known and busier than you can imagine, I raised the fee to £160, and then to £180. I was about to raise it again to £200 but I got outed to my family and it all went tits up. I ditched the name and started up again. I decided this new girl could not command the £180 figure, so I dropped the fee to £160 where it has remained ever since.

I could raise it again now, but I won't. The £160 is the upper limit for me and also the lower limit as well. I would not work for less. I feel the fee is in line with the standard of service I offer and deliver constantly. I do not know if it is down to market forces because I have never been quiet - ever. If I was it would make no difference because I do not need to make a certain amount of money each week. I could lower my rate to £100 or £120 but I would rather die than do that :)

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http://bigthink.com/ideas/39619

Perhaps you could discuss it's implications or explain it for the rest of us?

Although my knowledge of basic economic theory is now very rusty, I think that it would apply the current UK scene as follows:

If demand for working girls is reduced (e.g. as a result of Section 53a), prices will fall overall.

Normally that will cause a reduction in the number of working girls in the market.

If, as the abolitionists appear to assume, all working girls are trafficked, the number of trafficked women will fall.

If only a (small) proportion are trafficked, it will be other working girls e.g. those who would rather die that accept a fall in price, who will leave the market until there is a new equilbrium. As, presumably, trafficked women have no choice in the matter, they would be the last people to leave.

Therefore, the theoretical consequence of Section 53a, in so far as it is successful in deterring clients, will be a reduction in overall prices. It should have no effect on the numbers of trafficked women UNLESS all working girls are trafficked, which is clearly ridiculous.

So one of the major pillars successive governments have adopted to fight trafficking (Section 53a) will have no effect whatsoever in that fight. In so far as it actually works, (and there is little evidence that it is doing so to date), it will primarily result in a downward pressure on prices.

Which proves that either successive governments and their advisers have no grasp of basic economics or, alternatively, I don't. Oh dear!! If there are any economists (O level or otherwise) out there, I would be grateful if you could either confirm or demolish the above reasoning!

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Interesting article, and one which took me back to my own Business Economics studies. The price levels are quite interesting though, and could do with an article on its own almost. Although I've yet to peruse the services of a WG, I have spent some time on the-site-which-shall-not-be-mentioned, and it seemed like when the credit crunch hit the headlines, the prices dipped almost immediately. It would have been interesting to know if that dip was because of a perceived threat of losing clients or a real situation of less clients in the marketplace. One could also assume that the recession would have caused the new entry into the market of more WGs, which again could have lowered the price. In a way it's unfortunate that the whole "sex industry" is more or less hidden from the more socially acceptable means of measuring economic growth as I'm sure it could have some quite interesting revelations concerning the underlying health of the macro-economic climate. I doubt, however, that we'll ever hear Robert Peston discussing the impact of prostitution on the GDP. Perhaps we need another measurement to complement the Consumer Price Index, so we can all know how the rates of sexual services have moved recently; "It might be £200 today, but expect it to be £220 by Christmas."

As an aside, do WGs pay taxes? Or is it just hushed away by the tax man? If they do, can they deduct items like condoms, clothing, toys, etc.? I do believe you can even charge a small return because you're a home worker.

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There was a supermodel who was famous for saying she "wouldn't get out of bed for less that £xxxxx" wasn't there? I guess for WGs it's the opposite LOL.

I don't think WGs are that in having a price below which you just feel that people aren't treating you with any respect.

It was the Canadian, Linda Evangelista, in the early 90s. She supposedly was talking about supermodels as a group and said "We don't wake up for less than $10,000 a day" rather than "I wouldn't get out of bed" etc...

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There's a chapter "How is a street prostitute like a department store Santa?" in the book Super Freakonomics by Levitt & Dubner which discusses this topic in a suitably humorous way. Super Freakonomics is a sequel to plain Freakonomics by the same authors. Both books are a good read which you can get away with putting on your birthday or Christmas present list.

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one oddity in sex work is that wg's often have a floor price below which they will not work. This is in contrast with the model described when people will decrease their price in order to get work.

I think this is unique to sex work because of the special nature and intimacy of the work.

I am not criticising girls for having a ceiling price here, just saying it is a distortion of the simple model described in the article)

one other oddity is people who will pay more than the market price for something thinking they are getting better quality. Which is why people buy M&S spuds which are available from a market stall nearby for a fraction of the price. And why blokes engage £300/hr wg's when a £120/hr one will do as good a service.

Of course it is a distortion of any discussion about the economics of sex work. This job is like no other and you cannot 'pigeonhole' the economics of sex anymore than you can plait sand :)

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Everything depends on value for money. I used to only see girls around the £200 mark as I believed they would offer a better service and some were great! I've had a couple of punts at £150 or below and they've been good but I've also had punts at £250+ which have been exceptional with one blip. I've noticed some of the girls I saw at £250+ have now dramatically increased there services to £300+ and I now wouldn't go there because of the price, despite a part of me reminds me how much of an amazing time I had with them. I guess I'm just in the habit of seeing girls who advertise themselves as highclass (e.g £200+).

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There's a chapter "How is a street prostitute like a department store Santa?" in the book Super Freakonomics by Levitt & Dubner which discusses this topic in a suitably humorous way. Super Freakonomics is a sequel to plain Freakonomics by the same authors. Both books are a good read which you can get away with putting on your birthday or Christmas present list.

I loved the analysis of the price/value that is put on anal and how it impacts demand!

I throughly recommend both books even if you have no interest in economics - they are so well written and original.

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There is at least one economic forcasting group that use Escorts as part of their survey of economic situation in the uk, taxi drivers ,restaurants were in the same section.I can understand why they would be a good guide to how much liquid cash floating around.

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Sexual Economics: Sex as Female Resource for Social Exchange in Heterosexual Interactions (Roy F. Baumeister and Kathleen D. Vohs), is, I think, the best economic analysis of sex.

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The wiser and better educated members of Punternet might like to have a read of this article:

http://bigthink.com/ideas/39619

Perhaps you could discuss it's implications or explain it for the rest of us?

"Purely from the angle of economic return, the hard question is not why so many women become prostitutes, but why so few of them do." K. Davies 1937

The Sociology of Prostitution

Author(s): Kingsley Davis

Source: American Sociological Review, Vol. 2, No. 5 (Oct., 1937), pp. 744-755

Published by: American Sociological Association

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I have read both Freakonomics books, and they are a good read. Quite easy to understand for someone without much knowledge of economics, especially the terms (like me!).

I'm away to read the article Margaret mentioned.

I do believe many escorts have a lower-limit which they will not drop below. I also agree that criminalization of punters and/or increase of WG would drive prices down. I do not believe that sex-industry forums will have much impact however, since I think most punters (who come to me anyway) are only into this sort of thing on a casual / occasional basis - pick girl he likes the pictures/sound of, check there's no screaming red flags, punt , then sack emptied and forget about it until next time. Most punters don't give it that much thought / research.

Personally, I have another job which covers my living expenses and bills, cheap clothes, even the occasional night out but with hardly any wiggle room for savings or holidays abroad. So that is why I do sex work, as a little optional job. Like another WG above said, I'm not dependent on sex work for my basic bills so therefore can afford to put prices where I see fit, and people can take it or leave it. But if I wanted or needed to make a lot of money from it or save a lot of money to retire abroad at 30 or something, or relied on sex work as my main income, I may be more affected by pricing. It really depends I think on how busy you want/need to be.

Off to read up on economics! Can anyone recommend a good book or online resource on very very basic economics? For an uninitiated one such as myself? :D

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I think there's a book called Naked Economics which is quite straight forward!

And the article, mentioned above in a nutshell:

"...previous attempts to apply social exchange theory to sex have neglected one crucial aspect, which will be featured in this article. Specifically, sex is a female resource. Put another way, cultural systems will tend to endow female sexuality with value, where as male sexuality is treated by society as relatively worthless. As a result, sexual intercourse by itself is not an equal exchange, but rather an instance of the man getting something of value from the woman. To make the exchange equal, the man must give her something else in return and his own sexual participation does not have enough value to constitute this.” (Vohs, 2004)

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