The Economics Of Prostitution
Michael Noer
Tuesday, February 14, 2006
Wife or whore?
The choice is that simple. At least according to economists Lena Edlund and Evelyn Korn, it is.
The two well-respected economists created a minor stir in academiccircles a few years back when they published "A Theory of Prostitution"in the Journal of Political Economy. The paper was remarkable not onlyfor being accepted by a major journal but also because it consideredwives and whores as economic "goods" that can be substituted for eachother. Men buy, women sell.
Economists have been equating money and marriage ever since NobelPrize-winning economist Gary Becker published his seminal paper "ATheory of Marriage" in two parts in 1973 and 1974--also, notcoincidentally, in the Journal of Political Economy.
Becker used market analysis to tackle the questions of whom, when andwhy we marry. His conclusions? Mate selection is a market, andmarriages occur only if they are profitable for both parties involved.
Becker allowed nonmonetary elements, like romantic love andcompanionship, to be entered into courtship's profit and lossstatement. And children, in particular, were important. "Sexualgratification, cleaning, feeding and other services can be purchased,but not children: Both the man and the woman are required to producetheir own children and perhaps to raise them," he wrote.
But back to whores: Edlund and Korn admit that spouses andstreetwalkers aren't exactly alike. Wives, in truth, are superior towhores in the economist's sense of being a good whose consumptionincreases as income rises--like fine wine. This may explain whyprostitution is less common in wealthier countries. But the implicationremains that wives and whores are--if not exactly like Coke andPepsi--something akin to champagne and beer. The same sort of thing.
As with Becker, a key differentiator in Edlund and Korn's model is reproductive sex. Wives can offer it, whores can not.
To be fair, Edlund and Korn were merely building an admittedly grosslysimplified model of human behavior in an attempt to answer a naggingquestion: Why do hookers make so much money? Prostitution is,seemingly, a low-skill but high-pay profession with few upfront costs,micro-miniskirts and stiletto heels aside.
Yet according to data assembled from a wide variety of times andplaces, ranging from mid-15th-century France to Malaysia of the late1990s, prostitutes make more money--in some cases, a lot moremoney--than do working girls who, well, work for a living. This heldtrue even for places where prostitution is legal and relatively safe.In short, streetwalkers aren't necessarily being paid more for theirincreased risk of going to jail or the hospital.
Notwithstanding Jerry Hall's quip when she was married to Mick Jagger,about being "a maid in the living room and a whore in the bedroom," onenormally cannot be both a wife and a whore. "Combine this with the factthat marriage can be an important source of income for women, and itfollows that prostitution must pay better than other jobs to compensatefor the opportunity cost of forgone-marriage market earnings," Edlundand Korn conclude.
Ouch.
Another zinger: "This begs the question of why married men go toprostitutes (rather than buying from their wives, who presumably willbe low-cost providers, considering that they can sell nonreproductivesex without compromising their marriage)." Guys, nothing says "HappyValentine's Day" more than "low-cost provider."
Of course, it's easy to pour cold water on some of the assumptions madein Edlund and Korn's mathematical model. But these so-called "stylizedfacts" are supposed to predict human behavior; they don't necessarilypretend to mirror it.
In particular, the assumption that there is no "third way" between wifeand whore is problematic, if not outright offensive: "The thirdalternative, working in a regular job but not marrying, can be ruledout, since we assume that the only downside of marriage for a woman isthe forgone opportunity for prostitution."
Be sure to let all your married friends know what they're missing.
Also, the emphasis on the utility of children is puzzling. In mostWestern democracies, fertility rates have plummeted as wealth hasincreased. Empirically, men not only buy fewer whores as they getricher, but they have fewer children.
Still, the economic analysis of marriage explains one age-old phenomenon: gold digging.
"In particular, does our analysis justify the popular belief that morebeautiful, charming and talented women tend to marry wealthier and moresuccessful men" wrote Becker. His answer: "A positive sorting ofnonmarket traits with nonhuman wealth always, and with earnings power,usually, maximizes commodity output over all marriages."
In other words, yes, supermodels do prefer aging billionaires. And GaryBecker proved it mathematically decades before The Donald marriedMelania.
