Unsafe Sex in the City: Risk Pricing in the London Area
| DOI | http://doi.org/10.1111/sjpe.12183 |
| Date | 01 November 2018 |
| Author | Alexander Muravyev,Oleksandr Talavera |
| Published date | 01 November 2018 |
UNSAFE SEX IN THE CITY: RISK
PRICING IN THE LONDON AREA
Alexander Muravyev* and Oleksandr Talavera**
ABSTRACT
This paper studies the incidence, determinants, and pricing of unprotected oral
sex in the London sex services market. The analysis is based upon matched sex
worker–client panel data, which were collected from ‘field reports’ on Pun-
terNet.com website over the 1999–2009 time period. We find a steady increase
in the incidence of unprotected oral sex during this period, rising from <20% to
over 50% of all transactions. We show that the average premium for unpro-
tected oral sex amounts to about 10–14% of the transaction price, and that this
premium is higher if a sex worker has agency affiliation. Agency affiliated sex
workers are also less likely to engage in unprotected oral sex compared to inde-
pendent sex workers.
II
NTRODUCTION
In recent decades, the commercial sex industry has attracted considerable
attention from scholars and policy-makers across the globe. Academic research
has focused on the functioning of this particular market, for example, on the
supply and demand of sex services, price determination, the role of prostitution
intermediaries, as well as the pros and cons of government regulation (e.g.,
Edlund et al., 2009; Farmer and Horowitz, 2013). Policy-makers’ interest has
largely been driven by public health concerns. Indeed, the commercial sex sec-
tor is one of the main channels for the spread of sexually transmitted diseases
(STDs) including HIV (World Bank, 1999; Simic and Rhodes, 2009). Treat-
ment of these diseases entails substantial costs to taxpayers: they exceed £700
million a year in the UK (Health Care Commission, 2007). Furthermore, there
is evidence suggesting that the sector has been growing over the last decades.
For example, surveys in the United Kingdom find that the percentage of males
who paid for sex almost doubled between 1990 and 2000 (Ward et al., 2005).
1
The economics literature studying the commercial sex sector is relatively
new. A broad strand of this literature focuses on price determination in the
*National Research University Higher School of Economics (St. Petersburg campus) and
Institute of Labor Economics (IZA)
**Swansea University
1
See ‘It’s all about what you want and when you want it’, Guardian, 02 December 2005.
Scottish Journal of Political Economy, DOI: 10.1111/sjpe.12183, Vol. 65, No. 5, November 2018
©2018 Scottish Economic Society.
528
sex market. Several studies find evidence of elevated pay in the sector and
attempt to explain the ‘seemingly contradictory occurrence of free entry,
low-skill requirements, and high wages’ (Farmer and Horowitz, 2013). For
example, a cross-country summary by Edlund and Korn (2002) points out
high earnings in this sector worldwide, Moffatt and Peters (2004) find that
sex workers in the United Kingdom earn twice the average weekly wage of
a non-manual female worker, whereas Edlund et al. (2009) report high
wages for exclusive sex workers in the United States. Two main explanations
have been proposed as to why sex workers earn more than workers in tradi-
tional sectors. The first explanation emphasizes high opportunity costs due
to foregone marriage opportunities (Edlund and Korn, 2002), while the sec-
ond focuses on the stigma and reputation effects of both clients
2
and sex
workers that are associated with sex services (Della Giusta et al., 2009a,b;
Della Giusta, 2010). These theories have been tested in several studies,
obtaining mixed results (Arunachalam and Shah, 2008; Kotsadam and
Jakobsson, 2014).
Another stream of the literature studies the incidence of unprotected sex
and the associated risk premium. For these studies, empirical contributions
are usually based upon data from surveys of sex workers in developing
countries. For example, using Mexican data, Gertler et al. (2005) find that
sex workers receive a 23% premium for unprotected sex, which rises to
46% if the sex worker is regarded as attractive. Rao et al. (2003) report
that Calcutta sex workers who always use condoms receive 66–79% less
relative to those sex workers who engage in unprotected sex. In Ecuador,
Shah (2013) reports that a one percentage point increase in the local STD
rate increases the premium for unprotected sex by 28%. Gertler and Shah
(2011) show for Ecuador that the regulation of sex work decreases the
prevalence of STDs, as sex workers move from a riskier street environment
into less risky brothels. Using data from 192 Western Kenyan sex worker
diaries, Robinson and Yeh (2011) find that an unexpected income shock
(e.g., illness of a family member of a sex worker) increases the probability
of unprotected sex by 20.6%.
In the developed world, the evidence mainly comes from analyses of online
markets for sex services. For example, Adriaenssens and Hendrickx (2012)
study the online market in Belgium and Holland and find the premium for
unprotected sex to be at about 6.5%. Egger and Lindenblatt (2015) use data
from an online platform in Germany where sellers can advertise sexual ser-
vices and either offer them as an auction or at a fixed price and estimate the
risk premium at the level of 91% of the average hourly wage. In both devel-
oped and developing countries, the risk premium is typically estimated for
unprotected sex in general, without differentiating between various types of
sex services rendered.
2
For convenience, we use the term ‘client’ to refer to men who engage in transactional
sex-for-money with women.
UNSAFE SEX IN THE CITY 529
Scottish Journal of Political Economy
©2018 Scottish Economic Society
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