How much is it worth to you: Sex, economics and the influx of crowds

It was just yesterday that we reported – via the Voice – that pilgrimage of the sub-region’s sex workers to Ghana for the 2008 African Cup of Nations. A question on our minds, but a topic no news story could delve into, was how will these foreign women be treated? Not only by potential clients, but how will they be seen by other women?

If the world’s sex trade at least has more similarities than differences, perhaps this story by the Economist could shed a little light on the subject. The magazine recently ran a story regarding a set of papers on prostitution in Chicago and Ecuador delivered at a meeting the American Economic Association dealing in the sex trade. A couple caveats are in order: the paper on pimpin’ in Chicago is very preliminary. Secondly, we don’t know the similarities and differences enjoyed by the sex trade in these countries with West Africa.

The study, according to the Economist, found that sex work in Chicago is geographically concentrated, more than half the arrests for prostitution take place in just a few street corners. On the wage front, the study claims sex workers can expect to earn between $25 and $30 per hour – a number that may not translate all that well in Ghana. The important point is that this wage can be converted to about four times what the women could earn outside prostitution, a figure more relevant to our study.

Pricing strategies for sex are similar to any other economic transaction: fees vary by the service provided and clients are charged according to what they are perceived to pay. (Sorry, rich foreigners.) However, attractive prostitutes are generally paid the same fees as everyone else. One surprise: The charge for sex without a condom is not as large as expected, and their use is only found in 25 percent of tricks in Chicago. In Ecuador, however, condom use is standard.

In a relevant turn of events, the study’s authors stumbled upon a large festival in Chicago, so they could investigate what happens when demand suddenly increases.

By chance, the authors were able to study the effects of a demand shock. As people gathered for the July 4th festivities around Washington Park (one of the neighbourhoods studied), business picked up by around 60%, though prices rose by just 30%. The market was able to absorb this rise in demand partly because of flexible supply. Regular prostitutes worked more hours and those from other locations were drawn in. So were other recruits—women who were not regular prostitutes but were prepared to work for the higher wages temporarily on offer.