This August
the Economist released an article addressing the ways in which technology has
shaken up the world’s oldest business: the occupation of prostitution. While we tend to consider this practice part
of the underground market, there has been a recent study performed on the
economic factors that have been influenced by the newly widespread use of the
internet, along with other technologies, to circumvent the classical pimp-centered
model. Numerous websites and apps around
the world now specialize in allowing for information to flow easily between the
buyer of sex (the John) and the seller
(the prostitute). This ease of
information not only makes it easier for the John’s, but also makes it simpler
for prostitutes to work more safely, through the social networking aspects of
these websites. Prostitutes are able to
communicate with each other about any client’ violent behavior, and frequently
participate in background and health checks.
While
prostitution is still illegal in all states except for Nevada, the prostitution
market online is still very large, with many websites advertising themselves as
fictional. For this reason, it was
possible to use a recent survey to analyze the trends in the supply and demand
of prostitutes over the past decade, and the resulting price changes for the
offered services. Over the past 8 years,
the average price per hour for a female prostitute dropped from just under $350
per hour to just over $250 per hour.
While this change can be partially explained by the Great Recession’s
decreased consumer ability to purchase luxury goods as well as the increased
supply of women looking for other means of income, I agree with the article in
that the bigger factor is the advent of these new technologies. The ease of advertising oneself online has
boosted the supply of workers by drawing more locals into the sex trade, while
broader social change may have a factor in a reduction in demand, with speedy
hook-ups (through applications like Tinder), making sex much more easy than it
has been historically. The last major
factor influencing this significant drop in hourly rates is the move from the
pimp-based system to one with much lower costs, as the prostitute is able to
keep a much larger (if not 100%) share of her earnings, through the enabling of
self-advertising.
While the
sex trade is still obviously one that is very controversial and damaging, the
far-reaching impacts of technological advancements clearly have had a
significant impact on one of the shadiest industries that we know. I strongly encourage reading the entirety of
this article to anybody who would like to know more about the sleaziest of
economic topics.
Sources:
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