Superfreakonomics of Sex

[Guest W***ledi*Time]

Extract from Superfreakonomics: Global Cooling, Patriotic Prostitutes and Why Suicide Bombers Should Buy Life Insurance by Steven D Levitt and Stephen J Dubner, published Oct 2009 [bold type is my emphasis]:

It turns out that the typical street prostitute in Chicago works 13 hours a week, performing 10 sex acts during that period, and earns an hourly wage of approximately $27. So her weekly take-home pay is roughly $350. This includes an average of $20 that a prostitute steals from her customers and drugs accepted in lieu of cash.

 

Their income of roughly $18,000 a year is next to nothing compared with what even low-rent prostitutes in Chicago earned 100 years ago.

A woman working in a "dollar house" took home the equivalent of about $76,000 today annually, while prostitutes at the Everleigh Club, the city?s top brothel, could earn the equivalent of about $430,000.

 

Why has the prostitute?s wage fallen so far? Because demand has fallen dramatically. Not the demand for sex. That is still robust. But prostitution, like any industry, is vulnerable to competition.

 

Who poses the greatest competition to a prostitute? Simple: any woman who is willing to have sex with a man for free.

 

It is no secret that sexual mores have evolved substantially in recent decades. The phrase "casual sex" didn?t exist a century ago (to say nothing of "friends with benefits"). Sex outside marriage was much harder to come by and carried significantly higher penalties than it does today.

 

Imagine a young man, just out of college but not ready to settle down, who wants to have some sex. In decades past, prostitution was a likely option. While relatively expensive in the short term, it provided good long-term value because it didn?t carry the potential costs of an unwanted pregnancy or a marriage commitment.

At least 20% of American men born between 1933 and 1942 had their first sexual intercourse with a prostitute.

 

Now imagine that same young man

20 years later

. The shift in sexual mores has given him a much greater supply of unpaid sex. In his generation,

only 5% of men lose their virginity to a prostitute.

 

It?s not that he and his friends are saving themselves for marriage. More than 70% of the men in his generation have sex before they marry, compared with just 33% in the earlier generation.

 

So premarital sex emerged as a viable substitute for prostitution. And as the demand for paid sex decreased, so too did the wage of the people who provide it ....

 

Now let?s see how Allie makes so much more for doing so much less

....When she started out in Chicago, at $300 an hour, the demand was nearly overwhelming. She took on as many clients as she could physically accommodate, working roughly 30 hours a week. She kept that up for a while, but once she paid off her car and built up some cash reserves, she scaled back to 15 hours a week. Even so, she began to wonder if one hour of her time was more valuable to her than another $300. As it was, a 15-hour workload generated more than $200,000 a year in cash.

 

Eventually she raised her fee to $350 an hour. She expected demand to fall, but it didn?t. So a few months later, she raised it to $400. Again, there was no discernible drop-off in demand. Allie was a bit peeved with herself. Plainly she had been charging too little the whole time.

 

But at least she was able to strategically exploit her fee change by engaging in what economists call "price discrimination". She charged her favourite clients the old rate but told her less favoured clients that an hour now cost $400 .... It wasn?t long before Allie raised her fee again to $450 an hour, and a few months later to $500. In the space of a couple of years, Allie had increased her price by 67%, and yet she saw practically no decrease in demand.

 

Her price hikes revealed another surprise:

the more she charged, the less actual sex she was having

. At $300 an hour, she had a string of one-hour appointments with each man wanting to get in as much action as he could. But charging $500 an hour, she was often wined and dined ? "a four-hour dinner date that ends with a 20-minute sexual encounter", she says, "even though I was the same girl, dressed the same, and had the same conversations as when I charged $300".

 

.... So the real puzzle isn?t why someone like Allie becomes a prostitute, but rather why more women don?t choose this career ....Allie has never had any trouble with the police, and doesn?t expect to. The truth is that she would be distraught if prostitution were legalised, because her stratospherically high wage stems from the fact that the service she provides cannot be had legally.

 

Allie was a shrewd entrepreneur who kept her overheads low, maintained quality control, learnt to price-discriminate, and understood well the market forces of supply and demand. She also enjoyed her work.

 

But, all that said, Allie began looking for an exit strategy. She was in her early thirties by now and, while still attractive, she understood that her commodity was perishable. She felt sorry for older prostitutes who, like ageing athletes, didn?t know when to quit.

 

She had also grown tired of living a secret life. Her family and friends didn?t know she was a prostitute, and the constant deception wore her out. The only people with whom she could be unguarded were other girls in the business, and they weren?t her closest friends.

 

She had saved money but not enough to retire. So she began casting about for her next career.

She got her real-estate licence

. The housing boom was in full swing, and it seemed pretty simple to make the transition out of her old job and into the new, since both allowed a flexible schedule. But too many other people had the same idea. And Allie was aghast when she realised she?d have to give half of her commission to the agency that employed her.

That was a steeper cut than any pimp would dare take!

 

Finally Allie realised what she really wanted to do: go back to college. She would build on everything she?d learnt by running her own business and, if all went well, apply this newfound knowledge to some profession that would pay an insanely high wage without relying on her own physical labour.

 

Her chosen field of study? Economics, of course

.

(Longer excerpt posted at: )

 

http://entertainment.timesonline.co.uk/tol/arts_and_entertainment/books/book_extracts/article6879237.ece

[Guest s******ecan****]

a very entertaining read

[Guest S**a*Q]

That's very cool... I enjoyed that.

 

We are in a sense small business owners, with I might add, no overhead cost on the product we're supplying :) Other than the necessities to keep it looking good, condom/lube costs and driver fees.

 

I plan to go back to school as well, in a few years, but I'm gonna go to chef's school to be a pastry chef.

 

Betty Crocker eat your heart out!

[Kyra.Graves 23779]

Levitt and Dubner are great - Freakanomics is one of my all time favorite books. :) I've also been following the research of Sudhir Venkatesh for years now, his book Gang Leader for a Day really captured my interest then to discover that Prostitution and the social economics of the industry was one of his pet projects... well I think I fell in love. :oops: ;)

 

http://economics.uchicago.edu/pdf/Prostitution%205.pdf

http://www.sudhirvenkatesh.org/projectsresearch/sex-work

[Kyra.Graves 23779]

We are in a sense small business owners, with I might add, no overhead cost on the product we're supplying :) Other than the necessities to keep it looking good, condom/lube costs and driver fees.

 

I disagree with that, I think far too many people in this industry underestimate their actual costs. If one does an actual analysis on costs to run their business it is no different than any other industry. Being aware of each expenditure is what allows you to spend money effectively. :)

[Emma Alexandra 123368]

That's very cool... I enjoyed that.

 

We are in a sense small business owners, with I might add, no overhead cost on the product we're supplying :) Other than the necessities to keep it looking good, condom/lube costs and driver fees.

 

I plan to go back to school as well, in a few years, but I'm gonna go to chef's school to be a pastry chef.

 

Betty Crocker eat your heart out!

 

We have a bit more of a cost then looking good,condoms/lube...lol

but i don't want to get into that..lol

congrads on saving for school though that's a smart move...big hug!

[Guest W***ledi*Time]

Levitt and Dubner are great - Freakanomics is one of my all time favorite books. :) I've also been following the research of Sudhir Venkatesh for years now, his book Gang Leader for a Day really captured my interest then to discover that Prostitution and the social economics of the industry was one of his pet projects... well I think I fell in love. :oops: ;)

 

http://economics.uchicago.edu/pdf/Prostitution%205.pdf

http://www.sudhirvenkatesh.org/projectsresearch/sex-work

 

Thanks for the great links Kyra!

 

My eye was particulary caught by this passage from Levitt and Venkatesh's "An Empirical Analysis of Street-Level Prostitution" in Chicago (p.5):

We estimate that prostitutes are officially arrested only once per 450 tricks .... There is a surprisingly high prevalence of police officers demanding sex from prostitutes in return for avoiding arrest. For prostitutes who ... are working the streets ... roughly three

percent of all their tricks are freebies given to police.

So in a country where prostitution itself is illegal, these ladies are 13.5-times more likely to be extorted (for sex) by a cop than to be arrested by a cop. (Although in the summary data in Table 3, the number of arrests vs the number of freebies to police are very close in number. I presume the "arrests" in this Table include incidents of being taken down to the station ("hassled"), yet not having an end-result of an "official" arrest).

[TracieGold 282]

Extremely interesting!!!!

What about someone who comes from real estate into Escorting?

Tracie

[VedaSloan 119179]

I took issue with this particular phrase:

 

So the real puzzle isn?t why someone like Allie becomes a prostitute, but rather why more women don?t choose this career ....Allie has never had any trouble with the police, and doesn?t expect to. The truth is that she would be distraught if prostitution were legalised, because her stratospherically high wage stems from the fact that the service she provides cannot be had legally.

 

 

It's easy for someone charging up to $500 an hour not to worry about being arrested. They're working indoors and probably had the privilege to choose this career out of a few. Someone working the street probably didn't have an option and WILL have to worry about being arrested or exploited by the police. Many women who end up on the street are women trying to escape abusive relationships and end up turning tricks because they have no other option.

 

And the services we provide ARE legal, it has never been illegal to exchange sex for compensation, financial or otherwise, in Canada. To infer that someone would not want to decriminalize (I realize it says legalize, but that's something different) because then they couldn't charge as much is insulting to those of us who like our jobs and do it because we like it, and not because we want to make a buck. But it's also just a bad idea. Things suck right now because we have no access to legal, health or labour rights and the police abuse their privileges and criminalize people who are just trying to live. Decriminalization would make things better for everyone, not only for those of us who voluntarily chose to be sex workers, but for those who have been forced into prostitution as well. The police wouldn't look at sexually trafficked persons and then charge them with prostitution, which automatically equals deportation (if they're an immigrant). People would be able to walk around without worrying that cops are going to racially profile them and assume they're a 'ho because they're black, homeless youth, transgendered or from a low-income household (as in DC, where police set up prostitution free zones and then harass and arrest anyone they assume to be there for the purposes of prostitution). You could carry condoms around without fear that cops are going to use that as evidence that you're a hooker. You would be able to report sexual assault and rape without fear of arrest because you're a prostitute.

 

The reason prostitution carries a high risk for those working in certain sectors is because it is criminalized.

[curious2 323]

I was quite surprised by the observation that street workers with pimps were actually better off economically than those without pimps, since the workers with pimps didn't offer hj's only for some ridiculously low average rate (like $27.33 or something like that).

[pjrd 324]

I was quite surprised by the observation that street workers with pimps were actually better off economically than those without pimps, since the workers with pimps didn't offer hj's only for some ridiculously low average rate (like $27.33 or something like that).

 

I`m thinking there`s good pimps and bad pimps just like there`s good escort agencies and bad ones, good sp`s and bad ones just like in any other small business. this stuff is very interesting and I can easily relate to the fact that less work can bring more money depending on supply and demand and your reputation in your chosen field. Charge whatever the market can bear and don`t be shy.:motion::motion: