The Economics Of Prostitution: Sex, Lies, And Statistics

03-22-2014 • http://www.businessinsider.com, The Economist

It's hard out here for a pimp," complains the Three 6 Mafia, a rap group. A new study by the Urban Institute, a think-tank, casts doubt on this assertion. After investigating the sex trade in eight big American cities, researchers concluded that pimps can do rather well for themselves. Some in Atlanta bring in $33,000 a week, the study estimates.

Tracking the sex trade is hard. It is legal only in parts of Nevada. Elsewhere there are no receipts; researchers relied instead on interviews with lawyers, police, prostitutes and pimps. Their fat report, commissioned by the Justice Department, brought squeals of pleasure from journalists everywhere, who tended to play up evidence that the oldest profession is booming.

But it doesn’t appear to be. In five out of seven cities, the underground sex industry shrank between 2003 and 2007, the study found. (In one place, Kansas City, Missouri, there was not enough evidence to decide.) In Washington, DC, takings fell by 34%. In Denver, with a population of 2.5m in 2007 if you include the suburbs, the sex trade grossed a mere $40m.