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Bang for Your Buck: STI Risk and Pregnancy Risk as Sources of the Price Premium for Unprotected Sex


  • Manda, Constantine


Sex 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.

Suggested Citation

  • Manda, Constantine, 2013. "Bang for Your Buck: STI Risk and Pregnancy Risk as Sources of the Price Premium for Unprotected Sex," MPRA Paper 52864, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:52864

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    References listed on IDEAS

    1. Emily Oster, 2005. "Sexually Transmitted Infections, Sexual Behavior, and the HIV/AIDS Epidemic," The Quarterly Journal of Economics, Oxford University Press, vol. 120(2), pages 467-515.
    2. Raj Arunachalam & Manisha Shah, 2013. "Compensated for Life: Sex Work and Disease Risk," Journal of Human Resources, University of Wisconsin Press, vol. 48(2), pages 345-369.
    3. Jonathan Robinson & Ethan Yeh, 2011. "Transactional Sex as a Response to Risk in Western Kenya," American Economic Journal: Applied Economics, American Economic Association, vol. 3(1), pages 35-64, January.
    4. Paul Gertler & Manisha Shah & Stefano M. Bertozzi, 2005. "Risky Business: The Market for Unprotected Commercial Sex," Journal of Political Economy, University of Chicago Press, vol. 113(3), pages 518-550, June.
    5. Rao, Vijayendra & Gupta, Indrani & Lokshin, Michael & Jana, Smarajit, 2003. "Sex workers and the cost of safe sex: the compensating differential for condom use among Calcutta prostitutes," Journal of Development Economics, Elsevier, vol. 71(2), pages 585-603, August.
    6. Lena Edlund & Evelyn Korn, 2002. "A Theory of Prostitution," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 181-214, February.
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    More about this item


    Price premium; unprotected sex; STI; pregnancy.;

    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, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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