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Pricing Personal Services: An Empirical Study of Earnings in the UK Prostitution Industry

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  • Peter G. Moffatt
  • Simon A. Peters

Abstract

The hedonic pricing method is used to investigate the way in which the prices of prostitutes' services are determined. The data used in the analysis are extracted from an internet site, each observation being based on a report submitted by a client. The factors affecting price are identified in a regression framework, and combined with other information to provide estimates of the earnings, both aggregate and individual, for a sub‐sector of this underground service industry in the United Kingdom. Comparison of these earnings' estimates with data on earnings from alternative employment then allows us to estimate the compensating wage differential, and also to verify the theoretical prediction that prostitutes' earnings are positively related to earnings from alternative employment.

Suggested Citation

  • Peter G. Moffatt & Simon A. Peters, 2004. "Pricing Personal Services: An Empirical Study of Earnings in the UK Prostitution Industry," Scottish Journal of Political Economy, Scottish Economic Society, vol. 51(5), pages 675-690, November.
  • Handle: RePEc:bla:scotjp:v:51:y:2004:i:5:p:675-690
    DOI: 10.1111/j.0036-9292.2004.00327.x
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    Cited by:

    1. Alexander Muravyev & Oleksandr Talavera, 2018. "Unsafe Sex in the City: Risk Pricing in the London Area," Scottish Journal of Political Economy, Scottish Economic Society, vol. 65(5), pages 528-549, November.
    2. Immordino, G. & Russo, F.F., 2015. "Regulating prostitution: A health risk approach," Journal of Public Economics, Elsevier, vol. 121(C), pages 14-31.
    3. Thunström, Linda, 2007. "The Marginal Willingness-to-Pay for Health Related Food Characteristics," Umeå Economic Studies 724, Umeå University, Department of Economics.
    4. Trevon D. Logan & Manisha Shah, 2013. "Face Value: Information and Signaling in an Illegal Market," Southern Economic Journal, Southern Economic Association, vol. 79(3), pages 529-564, January.
    5. Islam Asadul & Smyth Russell, 2012. "The Economic Returns to Good Looks and Risky Sex in the Bangladesh Commercial Sex Market," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-25, May.
    6. Scott Cunningham & Todd D. Kendall, 2017. "Prostitution, hours, job amenities and education," Review of Economics of the Household, Springer, vol. 15(4), pages 1055-1080, December.
    7. Gregory DeAngelo & Jacob N. Shapiro & Jeffrey Borowitz & Michael Cafarella & Christopher Ré & Gary Shiffman, 2019. "Pricing risk in prostitution: Evidence from online sex ads," Journal of Risk and Uncertainty, Springer, vol. 59(3), pages 281-305, December.
    8. Mann, Stefan, 2015. "An activity choice approach towards pricing of 1:1 personal services – on the omnipresence of interpersonal utility comparisons," MPRA Paper 62516, University Library of Munich, Germany.
    9. Peter Egger & Andreas Lindenblatt, 2015. "Endogenous risk-taking and physical appearance of sex workers," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 16(9), pages 941-949, December.
    10. Pokatovich, Elena (Покатович, Елена) & Matyushonok, Vladislav, 2017. "Price setting in online Prostitution Market [Ценообразование На Рынке Онлайн-Проституции]," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 3, pages 222-235, June.
    11. Adriaenssens, Stef, 2010. "'Its all supply and demand': Market fatalism and norm construction by prostitution clients in the Netherlands and Belgium," Working Papers 2010/18, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
    12. Cunningham, Scott & Kendall, Todd D., 2011. "Prostitution 2.0: The changing face of sex work," Journal of Urban Economics, Elsevier, vol. 69(3), pages 273-287, May.
    13. Danielle E. Rabkin & Timothy K.M. Beatty, 2007. "Does VQA Certification Matter? A Hedonic Analysis," Canadian Public Policy, University of Toronto Press, vol. 33(3), pages 299-314, September.
    14. Collins, Alan & Judge, Guy, 2008. "Client participation in paid sex markets under alternative regulatory regimes," International Review of Law and Economics, Elsevier, vol. 28(4), pages 294-301, December.
    15. Jakobsson, Niklas & Kotsadam, Andreas, 2009. "What explains attitudes toward prostitution?," Working Papers in Economics 349, University of Gothenburg, Department of Economics.
    16. Rocío Albert & Fernando Gómez & Yanna Gutierrez Franco, 2007. "Regulating Prostitution: A Comparative Law and Economics Approach," Working Papers 2007-30, FEDEA.
    17. Niklas Jakobsson & Andreas Kotsadam, 2013. "The law and economics of international sex slavery: prostitution laws and trafficking for sexual exploitation," European Journal of Law and Economics, Springer, vol. 35(1), pages 87-107, February.
    18. Andreas Kotsadam & Niklas Jakobsson, 2014. "Shame on you, John! Laws, stigmatization, and the demand for sex," European Journal of Law and Economics, Springer, vol. 37(3), pages 393-404, June.
    19. Florian H. Schneider & Fanny Brun & Roberto A. Weber, 2020. "Sorting and wage premiums in immoral work," ECON - Working Papers 353, Department of Economics - University of Zurich.

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