Sunday, October 18, 2009

Freaky Gurls

The Superfreakonomics book by Levitt and Dubner has already suffered a pre-emptive strike over its "global cooling" analysis.

The chapter on prostitution is also going to need a look. Daniel Davies has noted the authors' unhealthy interest in this topic. The chapter is in today's Sunday Times (UK). Since everything in Superfreakonomics must be counterintuitive, the counterintuitive message of the prostitution chapter is that less is more: charging a higher rate for paid sex (and so reducing the number of "encounters") is more lucrative.

Being economists, they're obliged to provide an explanation for this and the explanation relies entirely on the demand side. The argument is that since it's now so easy for men to have casual sex (those awful temptresses at college apparently being the problem), the demand for commercial sex has declined and so the service providers have to position themselves at the high end to make any money.

The chapter includes a remarkable claim that begs scrutiny --

Their income [Chicago prostitutes] of roughly $18,000 a year is next to nothing compared with what even low-rent prostitutes in Chicago earned 100 years ago. A woman working in a “dollar house” took home the equivalent of about $76,000 today annually, while prostitutes at the Everleigh Club, the city’s top brothel, could earn the equivalent of about $430,000.

Why has the prostitute’s wage fallen so far? Because demand has fallen dramatically.


Besides the empirical claim about earnings, there is the argument that the only thing that matters for understanding prostitution is the demand side, not the supply side. And now Levitt and Dubner are in much-traversed territory, though they seem not to realize it. For one thing, the apparent infatuation with careers in prostitution has awkward echoes of Gladstone's "rescue missions" in London from the 1840s onwards. From what Gladstone encountered, it sounded very much like (1) the earnings from prostitution were fairly abysmal, but (2) the alternatives -- including his religious mercy houses -- were worse.

Dr. William Acton wrote contemporaneously (1857) about this period. Now although some of Acton's writings are easily ridiculed today (as a Victorian moralist), he also had enough of analytical mind to write the following --

Domestic servants, and girls of decent family, are generally driven headlong to the streets for support of themselves and their babies; needlewomen of some classes by the incompatibility of infant nursing with the discipline of the workshop. Those who take work at home are fortunate enough, and generally too happy, to reconcile continuance of their labours with a mother's nursing duties, and by management retain a permanent connexion with the army of labour, adopting prostitution only when their slender wages become insufficient for their legitimate wants.

In other words, 19th century prostitution was often a matter of unintended pregnancy precipitating a need for income and/or atrocious wages in the few available occupations. Times have changed. So if you're going to do a real economic analysis of prostitution, you'd have to look at the labour force participation of women, occupational patterns, availability of contraception and abortion, and legal and social standards regarding the treatment of working women (especially domestic employees). But that would be a lot more difficult than the Pygmalion frisson that they apparently got from "Allie".

UPDATE: One of the photo illustrations with the Sunday Times chapter is Billie Piper, as in Belle de Jour. So that's the image of prostitution. And of interest to the many Freakonomics bloggers, the Sunday Times excerpt of the global cooling chapter finally has a weblink.