Sunday, February 11, 2007

The Economics Of Prostitution


Economists are proving to be quite a controversial lot indeed..

Two well-respected economists Lena Edlund (Columbia University) and Evelyn Korn (Eberhard-Karls-Universitat Tubingen) have created a minor stir in academic circles by publishing "A Theory of Prostitution" in the Journal of Political Economics (a major journal of the field).

Three noteworthy points about their theory:

- Wives and whores can be considered competing economic "goods" that can be substituted for each other (i.e. men buy, women sell). However, spouses and prostitutes aren't exactly alike. Wives, in truth, are superior to whores in the economist's sense of being a good for whose consumption increases as income rises--like fine wine. Prostitutes, on the other hand, are more like "inferior goods"(i.e. income rises, demand falls).. One reason suggested was that wives can produce children that are socially recognised as coming from the father.. And Edlund and Korn quite successfully back it up with data that shows that prostitution tends to be less common in wealthier countries.

- Another point brought up by the model is that the primary reason for the high income earned through prostitution, a seemingly low-skilled but high-pay profession is not with the risks associated with the practice of prostitution but rather that prostitutes greatly diminish their chances for marriage by virtue of their occupation. Men generally don't want to marry (ex)prostitutes, and so women must be relatively well-compensated in order to forgo the opportunity to marry... in fact, the model goes further to postulate that seen from the flip side, "the only downside of marriage for a woman is the forgone opportunity for prostitution"! umm..

- One last prediction the model makes is that the income differential paid to prostitutes will rise with the status the culture accords wives. That is, if wives are valued highly, would-be prostitutes are giving up a lot by becoming prostitutes and will require more money to do so. And if wives have few privileges, would-be prostitutes aren't giving up much to become prostitutes and thus need less inducement to do so.

Is real life really so simple?

Wives or whores? Are our options really so limited?

As with all Economic models, simplifying the real world is necessary for us to better understand the workings of the world around us but in this case, I find the whole scenario rather bleak! what about the third category of women, namely women who work in regular jobs but choose not to marry? According to all the latest global statistics, this is a growing class of ordinary citizens in every developed country.. (in US for example 50% of women remain single!).. clearly this model needs some serious reworking… for one, i can't quite imagine that's the path many of my friends are considering taking just because they're unmarried! :O

And what about the role of love and companionship in marriage? Don't these factor when we're making one of the most major decisions in our life like whether to get married?

Of course marriage always comes with certain opportunity costs (ask the men who surely will agree!), but i'm not quite sure that many women will think along the lines of lost income from such a stigmatised trade when the time comes to consider whether to marry.. Alas how bleak life will be if we just looked at opportunity costs in dollars and cents! Or am I just being naïve... after all, the model did further make a point that for most women (even my mother, for instance!), being a wife proves to be the largest source of income..

As to the point of why prostitution pays so well, i suppose this is something i don't have a particularly good alternative explanation.. if i have to guess, it is probably a demand and supply thing .. if men stop wanting it so much, i'm sure prices will fall.. but then again, it may still boil down to the high "cost" women pay in terms of social stigmatisation if they choose to venture into this trade.. compensating differentials, if one may put it more formally..

Which to me means the best way any government should try to address the issue of prostitution is not to impose legal penalties against it but rather to try to improve the economic prospects for women in terms of other trades and perhaps also that of men as well so they'll end up "demanding" less of the "inferior" good (i.e. prostitutes)..

Well, that's certainly something to think about..

22 comments:

Anonymous said...

i don't know if the fact that richer countries have fewer prostitutes is due to their tendency to have wives rather than whores..

it could just be that the rich have the ability to travel to poorer countries and hence travellers from rich countries travel to poorer countries just for these services, hence supporting the sex trade in developing countries..

Anonymous said...

Is the original posting too simplistic?

The profession is as old as there exchange of goods and services existed.

So, what are the real or maybe new causal factors? Can these be wished away by intervention? Why does it persist even in developed and educated societies, and among the young one who do not need to engage in such a profession? Is greed a factor in the latter? If yes, are we not we talking about values rather than wives, legislations, etc.?

Some had a choice, while some didn't. Some who didn't have a choice were focused and got out when their purpose was accomplished. Others continued even when there was no reason to. Why?

Are we avoiding the brutal truth of reality, etc., and demonstrating a desire to 'handing such an issue' on 'someone' than on ourselves?

Anonymous said...

I agree with the model to some extent. Prostitutes have to be compensated for the opportunity costs involved in engaging in such a trade.

However, the model did not consider other factors such as the fact that wives are not being paid most of the time. Thus, they cannot be compared in terms of economic value. In fact, many work as free labour and even have to work to support the family. The men still look for prostitutes despite the fact that they have wives.

Besides, prostitutes do not fetch an uniformly high price! Those at Geylang, the older ones, the transvestites are much cheaper than those barbie-doll lookalikes who mingle in high society.

Hence, I think the model needs to be reworked. :O)

Anonymous said...

I agree with what Anonymous had to say, that the main problem is after all, - Man.
Do you really think there would be Prostitutes if all men weren't fickle, flirtacious, Un-commited to one lady by the law of matrimony?

Well, look into your hearts, Men.

Firstly, if you felt that your wife ain't up to your standard of "BEautiful" to last, you shouldn't marry her in the first place. You are just Insulting her that she is not up to your sexual desires.

And of course, women and prostitutes aren't to a factor at all. They are just consequences of Men being who they are.

If men, were not what most are today, all women would have been a happy loved wife.

You can always count on man to say that "my wife is such a fiery temper lady, i won't want to have sex with her" etc etc.

Well , ani cool, personally, i feel there's actually no economics behind this prostitution issue as i feel that it will just be a comparison between 2 completely unrelated issues altogether. As it will only be an insult to this powerful term called, "Love" .

Anonymous said...

i agree with the model saying tt the prostitues are sacrificing their chances of marrying as they enter this occupation. which guy would like to marry a girl who has undergo sexual acts with many guys.. but come to tink of it, girls resort to such occupation because they are poor, being forced or for the sake of the fast money...however we might tink such girls are cheap, we must oso try to understand the stories behind them.. but still they shouldn't enter such cheap occupation...

Anonymous said...

no one is at fault for such a situation, except for themselves. i feel that women who become prostitute are sluts and they ought to contract some from of STD and die. this would result in the purging of the world whereby all who have loose moral values and evil intention will ultimately be wipe out of the world.

Anonymous said...

cant really blame entirely on men themselves. both parties, males and females are at fault. if men can make a choice, why not females too? you have to make a choice in life, no doubt about it.

Anonymous said...

the article sure shows us a different point of view about prostitution hence it is interesting. but i guess the reason why prostitution is still currently in demand is because of the fact that you only have to pay for its services only when u have the need for it. unlike getting into a marriage where u have to pay and pay and PAY even if u did not ask for its services..hence i guess its still in demand and no doubt with the increasing number of bachelors, the prostitution job would increase with popularity.

Anonymous said...

I also find it distressing that people are turning to prostitution as a job. From the perspective of a human being and a christian, prostitution is the degradation of oneself to be a tool for others needs. Living in a modern society, human rights is widely preached but this act of being a tool for anothers wants is not befitting for a human being. No matter the reason, I feel that prostitution can never be justified.

Anonymous said...

CERTAIN THINGS ARE RATHER HARD TO EXPLAIN :)

Anonymous said...

hahas, y would man seek to find prostitutes when they already have their own wives ne? wont tt be unfair to their wives and children? waste money also =x

for mi, i believe that s** is a beautiful thing, and should b done only when there is love between 2individuals of the opposite sex. =DD

people say man love for sex, i strongly disagree wif that statement. its too hasty a generalisation and is being unfair to the good man out there. XD

Anonymous said...

I agree with what the prostitute does as they are just earning a living, in fact I do not think that is anything less than any other in the service industry. Anyway, they are also just trying to earn money by giving the customer the satisfaction he wants.

Anonymous said...

As for me, i think that it still comes back down to what is the demand.I personally feel that the mentality and the psychology of a man has to change.we see many foreigners being the prostitutes and the sick minded one.if we can solve this problem first then i think that wives have no fear of prostitues earning much more than them.the reasons why prostitues become one also play a role.reasons to why these males sleep with prostitues also has to take into consideration.

conclusion: Men...haiz.

Anonymous said...

I think not all factors are taken into account. This should be more of a moral issue than an economic issue. Prostitutes and wives cannot be measured.

Anonymous said...

I think its more of a moral issue than an economic issue. Indeed it can be seen that prostituion is seen as an inferior good, but being human beings, everyone is equal. Hence, prostitutes should not even be claimed as goods...

Anonymous said...

First of all, as a female chauvinist, I compleetely disagree with the idea of prostitution. I do not think it's the women's fault for going into such a demeaning trade. When there is demand for a certain good or service, only then can supply be produced to satisfy this demand. Thus, I feel that men are the guilty party in the creation of prostitution. Thus, instead of looking down on prostitutes, men should treat women in general more respect, so that future generations of women would not feel the need to satisfy this demand of prostitution.

Anonymous said...

i disagree with the last sentence of the article.
government should impose penalties to prostitution. more and more women are coming into singapore to do this kind of "business". this will definitely affect singapore image such as portraying spore as a "dirty" country. this thus affects the level of investment in singapore.
secondly. prostitutes breaks up family. affecting the women social status etc etc..

Anonymous said...

i believe that prostitution is a just a lazy and despicable way of making money. i'm sure that that there are other ways of making money without degrading yourself. however, we have to note that the men are at fault too. prostitution would only cease if there is no demand for it.

Anonymous said...

hmm, i beg to differ with dianah coz prostitution isn't just a lazy and despicable way of making money. I mean well u if you would look at this issue from another point of view, prostitution actually brings about and enhances the night life of S'pore. I mean look at geylang for example, isnt the red light district so lively at night? =/

Anonymous said...

i personally feel that prostitutes are quite pathetic because they are treated like inferior goods in our country and are not treated with respect. In fact, no woman would want to become a prostitute and they are doing this because they have to earn a living for themselves in this society full of cruelty and competitiveness. Hence, i feel that we should sympathize with them instead of labelling them as 'inferior' goods as they do have their own pride of being a prostitute too.

Anonymous said...

Prostitution is not career we should despise.In fact, this job arises from the demands of the men. However, many people would not admit that prostitutes play an important role in society. Thus their view is obviously biased.
- Zoro-

Anonymous said...

i don't think prostitution is the way to earn money. Prostitution will just contribute to the increase in marital problems and the increase in transmission of STDs. Degrading yourself to earn money is against your conscience. And wives should not be compared to prostitution as wives are not sex objects.