We now know more about the economics of prostitution than ever


Reuters

For obvious reasons, the underground economy around prostitution in most American cities (setting Las Vegas aside parts of Nevada) is tough to quantify. Sex workers and their clients exchange no receipts. Pimps pulling in thousands of dollars in cash in a typical week presumably pay no taxes on that income. And now that the market is increasingly migrating onto the Internet from the street, law enforcement has an even harder time keeping tabs on who's making (and spending) money here.

For all these reasons, there's never been good data on exactly how large the underground commercial sex economy is in individual cities. Today, though, the Urban Institute published an exhaustive inquiry into the subject in eight U.S. cities, in a report funded by the research arm of the Department of Justice. Broadly, the study concludes that local illegal sex markets are extensive, lucrative and perhaps more sophisticated than you think – and that the Internet has transformed them.

More specifically: Urban's researchers estimate that, in 2007, the entire illegal sex economy in Atlanta – including brothels, escort services and dubious massage parlors –was valued at $290 million. In Miami, it was $205 million (that's more than twice the size of the market there for illegal drugs). In Washington, it was $103 million. On the low end, in Denver it was about $40 million.

Between 2003 and 2007, Washington's market shrunk. Seattle's boomed. Meanwhile, the mean weekly income for a pimp in Denver, post-2005, was $31,200.

The report is the first of its kind to affix hard numbers like this to the shadowy market for sex work. The findings are based in part on 260 interviews with convicted pimps and sex workers, prosecutors, law enforcement officials and other experts in San Diego, Seattle, Dallas, Denver, Washington, Kansas City, Atlanta, and Miami (cities selected, among other things, for being part of "known 'pimp circuits' in the United States").

The paper contains some 30 pages of mathematical analysis of pimp earnings and populations to arrive at these numbers. But the short explanation is that the researchers relied on data about related illicit markets in drugs and guns, data given by the interviewed pimps themselves, as well as relative comparisons of the sex markets in all eight cities and across time within each one (in other words, they interviewed a lot of pimps who said things like "you can make about 20 percent more in Atlanta than in Miami" or "in Seattle, we're making twice as much as we did five years ago").

For a market with no bookkeeping trail, the sex trade turned out to yield some surprisingly complex and consistent pricing plans, where, for instance, a prostitute will generally cost you between $150 and $300 an hour:

But some of the most interesting findings in the report have more to do with the day-to-day structure of illegal-sex work than the aggregate size of each market. The researchers collected data on the "business-related expenses" of pimps, who evidently invest a lot more in transporting women around than protecting them from STDs:


These are the venues where pimps most often recruit women:


Where those women typically do their work:

And what they do to protect themselves while they're at it:


Many of the women interviewed in the paper described how the tumbling economy had undercut their work, and how the Internet was changing it -- redefining, in the words of the researchers "the spatial and social limitations of the sex market."

The internet makes it easier for women to find work, for pimps to organize them undetected, and for both to step out of public view. This is no doubt a negative development for law enforcement. But for the sex workers themselves, it's often meant that they can nab higher rates than what's available on the street, where sex is increasingly traded for little cash or illegal drugs.

If the street corner is a place for opportunistic encounters, the Internet is a place where competition is high, expectations are set, and negotiations are conducted ahead of time. All of that comes with some entirely new problems, though.

As one of the sex workers interviewed for the report put it: “Online, you can quote $120, but [the client] might not necessarily bring it, whereas on the stroll, you can see the money and see what [the clients] have.”

Emily Badger is a reporter for Wonkblog covering urban policy. She was previously a staff writer at The Atlantic Cities.
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