Scandinavian Working Papers in Economics

Memorandum,
Oslo University, Department of Economics

No 27/2005: Who’s watching? The market for prostitution services

Marina Della Giusta (), Maria Laura Di Tommaso () and Steinar Strøm ()
Additional contact information
Marina Della Giusta: University of Reading, UK, Postal: PO Box 218, Whiteknights, Reading, Berks, RG6 6AA, UK
Maria Laura Di Tommaso: University of Turin, Department of Economics "S. Cognetti de Martiis", Postal: Via Po, 53. I-10124 Torino - Italy
Steinar Strøm: Dept. of Economics, University of Oslo, Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway

Abstract: This paper presents an economic model of prostitution, which differs from the existing literature in that it makes no restrictive assumptions regarding the gender, pay, and nature of forgone earning opportunities of prostitutes and clients, and applies the same behavioural hypotheses to both. Our model gives a central role to stigma and reputation effects for both clients and prostitutes. We discuss demand, supply, and equilibrium results, indicating the possible effects of different policies on the industry and its different markets.

Keywords: Prostitution; Gender; Labour supply and demand; Reputation.

JEL-codes: J16; J22; J23; J24

31 pages, November 14, 2005

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