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Price setting in online Prostitution Market

Author

Listed:
  • Pokatovich, Elena

    (National Research University Higher School of Economics)

  • Matyushonok, Vladislav

    (National Research University Higher School of Economics)

Abstract

Due to obvious difficulties with collecting data, existing literature on economic analysis of prostitution seriously lacks empirical evidence. While behavior of an individual prostitute as an economic agent has been modeled in a number of papers, those models have rarely been supported by quantitative evaluations. The present article follows contemporary approaches to economic analysis of prostitution and at the same time makes use of the benefits that the Internet has brought to this type of service. In comparison to the recent past, modern individual prostitutes have much more opportunities to contact their clients online without the help of pimps or other intermediaries. Thus, the roles of market participants, the structure of risks, as well as price-setting mechanisms have significantly changed. In order to evaluate factors affecting prices set by Moscow prostitutes offering their services online, the article employs a hedonic pricing method. The authors show that the key factors are the location, where services are provided, and the quality of a profile picture as a proxy for costs incurred by a prostitute in order to raise the attractiveness of her website profile and her personal appeal. These results may be useful for further analysis of how prices and revenues in the prostitution market are related to legal markets and could be a part of a potential government policy regarding prostitution.

Suggested Citation

  • Pokatovich, Elena & Matyushonok, Vladislav, 2017. "Price setting in online Prostitution Market," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 3, pages 222-235, June.
  • Handle: RePEc:rnp:ecopol:ep1739
    as

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    References listed on IDEAS

    as
    1. Raj Arunachalam & Manisha Shah, 2008. "Prostitutes and Brides?," American Economic Review, American Economic Association, vol. 98(2), pages 516-522, May.
    2. Samuel Cameron & Alan Collins, 2003. "Estimates of a Model of Male Participation in the Market for Female Heterosexual Prostitution Services," European Journal of Law and Economics, Springer, vol. 16(3), pages 271-288, November.
    3. Rao, Vijayendra & Gupta, Indrani & Jana, Smarajit, 2000. "Sex workers and the cost of safe sex - the compensating differential for condom use in Calcutta," Policy Research Working Paper Series 2334, The World Bank.
    4. Chang, Hung-Hao & Weng, Yungho, 2012. "What is more important for prostitute price? Physical appearance or risky sex behavior?," Economics Letters, Elsevier, vol. 117(2), pages 480-483.
    5. 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.
    6. W. Erwin Diewert, 2003. "Hedonic Regressions. A Consumer Theory Approach," NBER Chapters,in: Scanner Data and Price Indexes, pages 317-348 National Bureau of Economic Research, Inc.
    7. Samuel Cameron & Alan Collins & Neill Thew, 1999. "Prostitution services: an exploratory empirical analysis," Applied Economics, Taylor & Francis Journals, vol. 31(12), pages 1523-1529.
    8. Lena Edlund & Evelyn Korn, 2002. "A Theory of Prostitution," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 181-214, February.
    9. Scott Cunningham & Todd D. Kendall, 2011. "Prostitution, Technology, and the Law: New Data and Directions," Chapters,in: Research Handbook on the Economics of Family Law, chapter 10 Edward Elgar Publishing.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    economics of prostitution; online prostitution; pricing analysis; hedonic prices.;

    JEL classification:

    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market

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