Bang for Your Buck: STI Risk and Pregnancy Risk as Sources of the Price Premium for Unprotected Sex
AbstractSex workers receive a price premium for unprotected sex. Research has inferred that the source of this premium is a compensating differential for STI risk. I introduce a compensating differential for pregnancy risk as a novel source through a simple model that incorporates both STI risk and pregnancy risk. I empirically test this using a rich panel dataset of 19,041 sexual transactions by 192 sex workers in Busia, Kenya collected during 2005 and 2006. I run sex worker-fixed effects regressions and find that compensating differentials for STI risk and pregnancy risk are sources of the price premium for unprotected sex. The price premium for pregnancy risk is USD 10, and USD 2 for STI risk (24 percent of average price). I also test for clients' disutility for condoms, another competing theory, and find that it is not a statistically significant source of the premium. Identifying and estimating sources of the price premium for unprotected sex will allow policymakers to implement interventions that will reduce both the supply and the demand for unprotected sex.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 52864.
Date of creation: 06 Dec 2013
Date of revision:
Price premium; unprotected sex; STI; pregnancy.;
Find related papers by JEL classification:
- I1 - Health, Education, and Welfare - - Health
- I10 - Health, Education, and Welfare - - Health - - - General
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
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