How do the economics of prostitution work

I was watching a documentary last night about sex workers, one was a woman who claimed to charge 2k an hour. That seemed insane even by US standards. But her clients were very well off men who probably had no need to comparison shop.

My understanding is in places like Germany or Amsterdam a prostitute who is attractive costs about $75. But I’m pretty sure it costs a lot more than that in Las Vegas.

So I’d assume supply and demand play a huge role, Vegas girls are one of the few legal options in the US, while Europe is probably a buyers market due to higher supply because of legal restrictions being removed.

Plus what role does immigration play in the economics? A prostitute from eastern Europe or southeast Asia where people earn far less (sometimes only a few dollars a day) will view $100 differently than those who are from wealthier parts of the world. Not only that but I think prostitutes in the third world who stay local charge way less, maybe $20 or less.

I guess a lot depends on the legal and social attitudes, supply and demand, the income of buyer, the living standards of sellers, etc.

point is, how can prices vary so wildly for the same thing? In the US I think a few minutes of lap dances probably costs as much as a prostitute in Germany. An attractive hooker may cost $5 in one part of the world, $20 somewhere else, $100 somewhere else and $1000 somewhere else. The service is the same though.

“Vegas girls” are not a legal option. There is legal prostitution in Nevada, but only in certain counties, and Las Vegas is not one of them. There are of course illegal prostitutes in Vegas, as in every other city in the world, but I don’t know what the enforcement situation is like.

I’m not sure that you can get a factual answer on this so I’m offering an opinion.

Just like real estate it has to do with location, location, location.
The location sets the regulation and the amount of regulation more or less affects the price.

Higher regulation = higher price.

And nitpick - a prostitute in Vegas would probably be quite expensive since it’s illegal there. You’d have to seek out an other Nevada county where it is legal. Even there, if the industry is highly regulated, a legal prostitute would be expensive.

Head to an economic area with low regulation and a lot of willing workers and you will see a significant price drop.

It’s all about branding. Think about what you pay for a tomato. Then think about whether you’d pay the same amount if you had no idea where the tomato came from and whether it was safe to eat.

That’s where the price differential is in the sex trade: a guarantee. When you hire a callgirl from a “reputable” agency, you’re paying for a certain minimum level of service and (hopefully) a chick who is tested for communicable diseases relatively frequently. That girl isn’t going to kick you in the nuts and run out of the hotel with your wallet, or give you the clap, or shake you down in exchange for not telling your wife. She’s also not going to lure you to a warehouse where her boyfriend can shoot and rob you. I have no personal experience of this, but I suspect you also don’t have to worry about awkward bargaining sessions if you want her to do something unusual.

When you pick up a hooker, you’re basically taking your chances.

Rather than use a real estate analogy, I would simply use a ‘paid travel’ one. IOW just like there’s coach, business class, & first class available in all forms of traveling (planes, trains, ships & rental cars) the same is true of prostitution. And it’s determined by what the market can bear, i.e. its self-regulating. People will always choose the highest level of service that they can afford. Obviously the ‘entry’ level is going to be the most common…

It’s no different than buying a car. At the most basic level all a car does is get you from point A to B. Then why don’t all cars costs the same? Because there’s a huge difference in the driving experience between a broken-down rustbucket and a Ferrari. Same with hookers. Prettier, cleaner, more refined and skilled girls can command a higher premium than your average looking pro. This holds true no matter where you go in the world.

Last time I was in a strip club a lap dance was $20 for a 3 minute song. In Germany, 30 minutes with a prostitute in an FKK club will cost you 50 Euro (~$67, plus the entrance fee). Per unit of time it’s actually cheaper there.

Freakonomics had a chapter on the economics of prostitution. You can find a number of stories on the topic at their website: http://freakonomics.com/tag/prostitution/

All these things play a role, prostitutes from contries with lower income levels will view the money differently. But still, even the cheapest alternatives provide relatively high incomes for what is essentially unskilled labor.

Most girls will be more concerned with making a certain amount of money in a set time period, and be less concerned with how much sex that entails (I would think…within reason). In places with legal prostitution it is fairly easy to get in contact with customers and thus easier to have multiple clients a day (or even hour). If every ‘date’ has to be set up beforehand and with reference checks, it’ll take a lot more time to actually meet up with just one client.

An example, there are quite a few FKK clubs in germany where the price is even lower than the 50E mentioned above; 40 or 30 for half an hour. But if these clubs attract more men (and they do), the girls will have far more business. I actually new a girl from a 30 euro club and met her at a 50 euro club (almost double the price for 30 minutes) and she told me her average daily earnings used to be around 350 E (so 2100 a week if she works days; no more taxes) and now she struggled to make 100. The fact she had sex 80+% less, wasn’t even mentioned. In general you will never see a girl happier, as when she has just returned from her 20th fuck of the day.

“… Cost a little extra if you want to take all year!..”

:wink:

To sum up what the others have said: prostitution isn’t a thing anymore than housing is a thing or food is a thing or clothing is a thing. You have an enormous range of options catering to differing tastes and spending levels and notions of safety.

If you’re paying $2000/hour for a prostitute, you’re probably not paying more because the prostitute is more physically attractive. You’re paying for discretion and class. You’re paying for someone who is getting regular STD checks and chooses her clients carefully and isn’t doing risky things because her pimp will beat her or has her hooked on drugs.

The most common going rate in Vegas seems to be in the 300 - 500 dollar range… Or so I’ve heard. :slight_smile:

Actually my interest has all been academic. You can get a lot of information on this (and the rest of the country) at the TER site. Google 'TER las vegas" and it should be the first listing.

j.

It’s true, of course, that safety, discretion and things like that are huge factors. But even if the service was guaranteed identical worldwide I’d still expect vast price differences.

Near where I live there’s a bar where you can get a beer for the equivalent of $1.50, then within 10 minutes walk another, very similar style bar, where the same brand of beer is $15.00. Yes, really, a factor of 10 difference.

And that’s a product where you can easily and quickly compare like for like prices with no risk or embarrassment, within a small geographical area.
For products where there is a significant personal cost to just making enquiries I’d expect large price differences. And then as we go country to country with different wealth, different culture about visiting prostitutes, and so on the differences would be huge even before we factor in different laws.

The connection between supply and legality isn’t actually as clear as that. Sex work is certainly more visible without legal restrictions, but that doesn’t mean there’s actually more of it. Cross-country comparisons are suspect because they ignore other relevant factors (eg, social welfare supports that might prevent people entering prostitution) but, to give a before-and-after example that contradicts your assumption, research in New Zealand has found no evidence of increased supply since decriminalisation.

Yep - as some allude to - much of the variety can be within the city itself. Ifnore for the sake of argument those claiming to make $1,000 an hour or whatever. That is EXTREMELY rare - and most of them are lying. In the US - $300 to $600 is pretty much the upper end, and there are maybe a couple hundred women that can charge more than that on a regular basis. You absolutely do not need to spend more than $600 to find super hot virtually supermodel/playboy type of women.

In the US you will find in most major cities basically six types of prostitutes -

  1. Street walkers - almost all of which you can get blowjob/handjob/vaginal - sometimes anal this is considered the bottom rung and the act will usually take place in the guys car. Prices are usually $20 to $60 with sometimes a tip for swallowing. Some guys actually prefer these women to other “higher end” women. Most are on drugs, but some are just poor and trying to support their family.

  2. Spa girls - I am talking the ones you see open 24 hours or listed in adult sections. Most of these will give you a handjob (happy ending) - plenty will also blow you or have sex. You usually pay the house a set fee of ~ $80 and then pay the women a tip - somewhere from $20 to say $120. It is beyond me why people go to these places for sex - as while sometimes it is the only choice in an area - some won’t do it your first time - and in almost all cases the pics on the websites/ads are not accurate.

  3. Strip clubs - most strip clubs in most of the areas of the US you can not get laid in. However some you can - and many of the girls there will kind of imply they will have sex with you in the champagne room (Ill restrain from saying it and allow someone else the opportunity :slight_smile: ) or during a lap dance. Some will have sex with you in a separate room or blow you/give you a hand job. There is really no set fee for this that is customary - it sometimes involves you paying several people tips - sometimes just the girl - and many times you leaving with blue balls. Why people go to strip clubs looking to get laid is beyond me. In good strip clubs - a hot girl can actually make more stripping than she can having sex. It is simply not worth it to her unless you are offering her a price that is way more than you would need to spend elsewhere.

  4. Internet - craigslist, backpage, Eros - sites like that in that order. Although Craigslist has banned adult ads - it still happens there regularly. They post an ad in casual encounters - and it will usually be taken down in ten minutes or less. During that time there are guys constantly hitting refresh and for some - part of the excitement is connecting with the girl before the ad is removed. Craigslist sex often happens in motels and will run usually say $50 - $100. Backpage is currently the biggest site where you can easily and regularly find women. Some is organized prostitiion - some are independent - often transactions are prices in ss/hh increments meaning short stay (15 minutes) or half hour and hour. Prices vary, but you are looking at say $50 for a short stay - up to maybe $150 for most for an hour. Some charge more, but most of those aren’t backpage only. Virtually all backpage sex happens in motels/hotels. Eros is more for agency type women which I describe below

  5. Agencies - most of these are on the internet. Some/most have a screening process. Some require a reference and some will verify your employment. These tend to be the better looking more reliable women and guys rely on the agencies somewhat to screen out unreliable women. You are more like to get what is known as GFE (girlfriend experience sex) - sex which isn’t purely wham bam, but where there girl actually will act like she likes you. You may find this hard to believe, but many - intact most backpage girls (picked at random) will literally take your dick out of her mouth if she gets another call. So anyway - agencies sometimess will have maybe as few as 3-6 girls - and they will charge usually $300 an hour being most common with prices in the $300-$600 range probably encompassing the majority of what an agency will charge. Some will operate I call only, but most will send a girl to your home/hotel - or the girl will setup a meeting at a nice hotel.

  6. Sugar babies - I hesitate on putting this down here, as in my mind it isn’t really prostitution, but I know many would consider it such. You go to a website and get an account. The girls do the same. You set up a meet and greet and you negotiate an “allowance” - sometimes this is a weekly or monthly stipend, but most often ends up being per meeting. Often sex does not happen on the first date, and many times isn’t specifically mentioned. Price vary wildly but in most areas ends up being $100 - $200 per meeting. This is sometimes the most attractive option to the woman - as she has great flexibility in choosing who she sees. Many women will actually only “date” one guy and the same goes for the sugar daddy as well. This often will involve dinner and sex - while the vast majority of the other options do not. Sometimes trips as well. Prices are not based on an hourly basis and there is usually a much greater element of trust and mutual respect between the two parties.

May I ask how you obtained that much information? :slight_smile:

Ok, so there are a long list of factors that go into the price of a hooker. Off the top of my head (I wish I had taken microeconomics in college, or is this macro. I don’t know):

Supply of prostitutes
Demand of Johns
Desperation of prostitutes (more desperate for cash = lower price)
Desperation of Johns (higher price)
Standard of living in the area and what the market will bear (nobody hooks for $3 in the US like some hookers do in India)
Risk to the seller (higher prices)
Risk to the buyer
How informed the buyer and seller are about their options
etc

So yeah, a hooker with lower risk to the buyer (no blackmail, no diseases, no being double crossed, etc) is going to charge more. But can’t you find those same traits (disease free; no robbery/blackmail/violence since it is against house rules, etc) in a physically attractive hooker in Thailand for $40? Or in Germany or Amsterdam for $70?

I’ve heard prices are bottoming out in Germany due to increased supply of hookers to the point where some are only charging $20, and some brothels are offering an ‘all you can eat’ option where you pay a flat $100-200 and you get maybe 6 hours of all the screwing you want.

I think the cheapest hookers get on earth is about $0.50 to $1 a trick. I think that is the rate in some of the more dysfunctional parts of sub saharan Africa like Ethiopia or Somalia. But if a really high end hooker in a place like NY or SF may charge $1000 a trick, that is a factor of 1000x+ difference between the cheapest and most expensive semi-skilled labor. Are there other vocations that offer that kind of income variety?

Example, if people in a US factory make $25/hr in wages/benefits and the factory is moved to Bangladesh where people make $0.25/hr in wages and benefits, it costs 100x less. Drug prices vary drastically in the world. A kilo of coke costs maybe 1k in Columbia, a kilo of coke in a US prison (bought in small fraction of a gram increments) will likely cost 150k or so. But those are price fluctuations of a 100x or so at the most. Prostitution prices vary far far more than that globally.

But maybe it is because I’m looking at extremes. If you remove the absolute cheapest ones and the absolute most expensive, most seem to fall in the $30-300 range. The price difference between Thailand hookers and European hookers is only about 2-5x more expensive in Europe, not hundreds of times more expensive.

You get most things correct. But you forget to include the amount of money girls can make in a certain system.

I would guess that a girl from a reputable agency in the US will only be able to have one or two clients a day, with many days without business. Just because of setting stuff up, travel, checking references.

If you are standing in a window, or are in a club in Amsterdam or Germany, you could have more than 10 clients daily. So there are probably girls making more behind a window charging 50 euros than the girl that works as a few hundred dollar call girl.

The same is true for the Pauschal clubs and partytreffs in Germany (the ‘all you can eat’ you refered to). They may be getting very little for each session, but they are secure in making a certain amount of money each day (say 150E). In a normal pay-per-session club she may have days without making anything (early in the week and she needs at least one client to cover the entry fee). There are plenty girls that try both options and figure the steady 150 is preferable over the stress of having great days and terrible days. BTW 150 at 5 days a week makes 3000 euros a month clean, which is a pretty good income for some of the Eastern European girls (often they can sleep in the club as well, so this is all money to spend). Hell, this is a pretty good salary for anyone in Germany or the Netherlands.

BTW there are plenty of gorguous girls available for 30/40 euros. For an example, have a look at the (NSFW) pics of Nieky on the website of a club called Samya.

I was hoping you’d reply, aren’t you the one that did a thread about German brothels once? Looking at that site a lot of the women are very pretty and the prices are about the same. 50 euros for the first half hour, then 25 for an additional half hour. I’m guessing in a situation of decriminalization/legalization that is near where prices bottom out (although again they do get lower in Germany, down to 20-30 euros in some parts).

How does the German government ensure nobody under 18 is involved, nobody is being trafficked against their will and the women are not being exploited/abused?

See A Theory of Prostitution (PDF, 34 pages), an academic research study by Lena Edlund and Evelyn Korn for an extensive detailed analysis of the economics.

In summary: In the cold a-moral economic analysis, wives and prostitutes are competing commodities in their overlapping markets, but wives are decidedly the superior commodity, as they can provide men with children who will be recognized as theirs. Prostitutes, however, vastly reduce their chances of ever getting married due to the stigma of being (ex)prostitutes, and must demand a price that will compensate for that. Males tend to patronize prostitutes in inverse relationship to their (the males’) wealth, as the wealthier males can better afford the expense of having wives, which are the preferred commodity; while less affluent males who cannot afford wives will patronize prostitutes. The research report examines this in 34 pages of elaborate mathematical economic detail.

ETA: Mathematician John Allen Paulos, author of “Who’s Counting” column, discusses this summarily in Who’s Counting: Sexonomics – Prostitutes’ Incomes (They link to the same article on another site, but this one is paywalled.)