Revealed preferences in prostitution
Posted on: February 5, 2008
The stereotypical customer of prostitutes is a seedy, desperate old man in a trenchcoat. I have tended to think (without any empirical evidence, I hasten to add) that it’s more likely to be a stereotype based on prejudice rather than experience or observations. After all, not many people have the opportunity to observe a representative cross-section of brothel clients. However, today’s article on Stuff reporting that many prostitutes are being displaced by under-age sex workers was very disturbing.
Of course, it is terrible when children are pressed into such occupations and our first reaction is shock that it happens at all. What I find almost more worrying though is that there is demand for their services. Economists use the theory of revealed preference to analyse these choices. The idea is that a person looking for a prostitute has the option of engaging either an under-age worker or a legal worker. If they choose to engage the inderage worker in those circumstances then it indicates that they prefer sex with an under-age girl. Given that they could be charged with a serious crime if caught, the cost of an underage prostitute is significantly higher than the cost of engaging a legal prostitute. This suggests a strong preference for under-age sex among those men who choose to use the services of under-age workers.
If Stuff is correct that workers over the age of 18 are being displaced, it suggests that many men who seek to prostitutes’ services are not just seedy but have a tendency to prefer under-aged sex. So maybe the stereotype isn’t harsh enough!?
6 Responses to "Revealed preferences in prostitution"
February 5, 2008 at 4:14 pm
“don’t consider the probabilty of detection X”
I think it is more likely that they under-estimate their probability of detection, as the sample of ‘johns’ who are left on the market for the underage prostitutes is biased by the fact that they are the ones that haven’t been caught yet – irrationality is a bit of a strong word, its always my last resort 😉
February 5, 2008 at 4:21 pm
Either way, they must consider sex with an under-age prostitute to be at least as risky as sex with a legal prostitute, which is all that is required to see the revealed preference. It seems likely that, regardless of biases, they prefer under-age girls to over-18s. I’m not bothered by stupidity, I’m bothered by the fact that a significant proportion of customers in the industry seem to prefer under-aged girls.
February 6, 2008 at 9:59 am
Or perhaps, an article descibing the average john as the guy next door, doesn’t sell newspapers.
February 6, 2008 at 10:31 am
Another downward force on the older streetwalkers’ market share could be the an increase in brothels following the recent prosititution reform. Relying further on stereotypes, an older street worker may be an inferior good to a brothel worker. The displacement of older streetwalkers may be that they’re now competing directly with underage girls in a way they weren’t really before.
Perhaps legal brothels have increased the supply of ‘less skanky than streetwalker’ prosititutes and the streets have become the discount mall for last season’s goods and the black market for illegal items where the brothels are now the high street retailers.
I’m just surprised that this problem described in the Stuff article is a new one – this is the oldest profession after all. I’d suspect the only change in the playing field is the law reform and legal brothels seem to be the biggest visible change I can think of.
[…] this is a favored measure we have for actually revealing (to some degree) what is optimal (here, here, can’t actually find any of the tax posts […]
agnitio
cpworthington
dant03
goonix
metrosideros
rauparaha
Robbie Allan
stevedoogue
Matt Nolan
The visible hand in economics 
February 5, 2008 at 4:10 pm
or perhaps johns aren’t the most rational decision makers and don’t consider the probabilty of detection X their expectation of punishment plus the monetary costs envolved. irrationality would also fit with perfering child prostitutes