The optimal regulation of massage and prostitution

The job market paper of Amanda Nguyen, of UCLA, is on that topic, I found her results intriguing:

Despite its illegality, prostitution is a multi-billion dollar industry in the U.S. A growing share of this black market operates covertly behind massage parlor fronts. This paper examines how changes to licensing in the legal market for massage parlors can impact the total size and risk composition of the black market for prostitution, which operates either illegally through escorts or quasi-legally in massage parlors. These changes in market structure and risk consequently determine the net impact of prostitution on sexually transmitted diseases (STDs) and sexual violence. I track the impact of two policy changes in California that resulted in large variation in barriers to entry via massage licensing fees. Using a novel dataset scraped from Internet review websites, I find that lower barriers to entry for massage parlors makes the black market for prostitution larger, but also less risky. This is due to illegal prostitution buyers and suppliers switching to the quasi-legal sector, as well as quasi-legal sex workers facing a reduced wage premium for high-risk behavior. Consequently, the incidence of gonorrhea and rape falls in the general population. I also present evidence that growth in the quasi-legal sector imposes a negative competition externality on purely legal massage firms.

I don’t find the rape result intuitive, but I am seeing it pop up in a number of papers, so perhaps it should be taken seriously.


Be curious whether the author has looked into other measures of the size of the illegal segment of the sex industry in CA. TER was not the only review site that was operating in CA at that time and one particularly important regional site, MyRedBook, was shut down in 2014 after operating throughout the rest of her study. Moreover, TER represents a single band of the indoor market, which is highly segmented. I should drop her an email..

Or, to be more accurate, despite its illegality, prostitution has remained a major economic activity throughout essentially all societies and eras where economic transactions involving buying and selling using money occur, regardless of whether prostitution is legal or not.

'A growing share of this black market operates covertly behind massage parlor fronts.'

Another economist seemingly unaware of a common term, in this case 'bribery.'

'I don’t find the rape result intuitive'

So, you have completely bought into the idea that rape has nothing at all to do with sex?

I really like this construct:

"To be more accurate, [I am going to state something that has little to do with the specific research and doesn't refute it or add to the findings in any way]."

The rest of your points are non sequiturs, too.

> I don’t find the rape result intuitive

What? How? Rape and prostitution are almost assuredly substitutes for sexually frustrated men. Similarly it's pretty well established that the availability of Internet pornography reduces rape. This isn't to say that rapists aren't evil, but they're more likely to selfishly avoid legally risky behavior on the margin when substitutes are available.

I'd hazard a guess that the median MR commenter is a sexually frustrated man, so you have a good chance of getting useful comments straight from the horse's mouth.

I have never used the services of a prostitute, except one time in Thailand, and it was like having a girlfriend, in fact, I considered it like having a girlfriend for a day. That fantasy was briefly marred when she got a text from another boyfriend. She was a nice woman; have lost touch with her. Of course we used protection and it was not for just sex, but to see if she and I were compatible for a long-term relationship. That's right.

If you paid her, it was all about the money for her.

Just a few days ago you claimed to have visited a prostitute in Serbia. I am sure if I could be bothered to check your comments I would discover other competing claims

I’d hazard a guess that the median man is a sexually frustrated man.

Hehe, yeah...with the exception of gay men, male sexual frustration is probably a spectrum where your position shifts over time between a little and a lot.

This type of condescension for men is exclusively the province of 'really cool' liberal men who may or may not have or a want a pony tail. I'd hazard a guess that Alan is such a man.

And this successive type of condescension is the province of conservatives and churchgoers who delude themselves into thinking their monogamous, missionary existences keep all parties satisfied.

Say Mitch, what's it like to never masturbate? All the pony-tailed liberals would like to know.

Almost assuredly? It must be pleasant to make assumptions based on pop psychology.


Are not the people who assume that rape has "nothing to do with sex" or frustrated sexual desire also making assumptions based on pop psychology of a different kind?

It certainly seems like the more sexually restrained cultures are a lot *less* rapey than more sexually indulgent cultures.

Is that sarcastic? ME/India?

I (unfortunately) foresee prostitution becoming legalized as a result of growing inequality and the declining compassion the wealthy and powerful feel for those at the bottom of society. If we, as a society, actually cared about poor women and girls (and boys) we could largely stomp out prostitution by stepping up sting operations, increasing penalties, and requiring pimps and "johns" to register as sex offenders. Repeat offenders are good candidates for chemical castration. Prostitution itself should be decriminalized as prostitutes are very, very often victims of physical, emotional, and sexual abuse. Pornography should be categorized as prostitution and punished similarly.

Republicans say the darnedest things.

I'm not a republican. I consider myself an old-fashioned liberal (not radical leftist, libertarian or conservative.)

Women who want to eliminate casual no-ties competition would say similar things.

Opponents of legalized prostitution love it when you make arguments like this. No one is changing laws so that sexual frustrated males who can't attract dates can get laid. So I guess what I'm saying is thank you for supporting my cause.

"I (unfortunately) foresee prostitution becoming legalized as a result of growing inequality"

"Republicans say the darnedest things."

Own your allies, honk.

Well, at least we know where you are on the freedom-coercion scale.

I always wanted to peer into the head of someone on the far other side. It isn't pretty, and some things can not be unseen. Be careful what you wish for.

Prostitutes are always coerced and sexual/physical abuse is the rule rather than the exception. Women and girls' bodies are not mere receptacles for male sexual incontinence. A universal basic income should also be implemented to remove the financial neediness that forces some women and girls into sexual bondage.

> Prostitutes are always coerced and sexual/physical abuse is the rule rather than the exception.

[Citation needed]

I am not so sure about this, at least in Northern Europe. But i agree that this a POVERTY problem. We can only erradicate prostituition, once we erradicate poverty. Until then, prostituition will continue to exist, regardless of the law.

Prostitutes are not always coerced. Simply not the case.

Poverty will not eradicate prostitution either. Poverty might affect the supply side, but the demand side will continue to exist.

"this a POVERTY problem."

No, this is an "I want things that I can't afford, probably drugs" problem. In the United States, our welfare system fully encompasses all basic needs - free housing, free food, free health care.

That's not true in the US - I've read that basically it's easy and lucrative for some girls who enter the profession here. What would you want - work 9 to 6 at some dead end retailer making minimum wage, or work a few hours / day and make thousands of dollars / day? Many women who do it here are basically lazy and greedy.

Agree on the coercion point but why does that make them lazy and greedy? How about resourceful or bold risk-takers? And based on my memory of Superfreakonomics I highly doubt most are making anywhere near thousands of dollars a day.

Right.. that's why I said some/many prostitutes. Basically, if you're attractive face, have a good figure, and know how to present yourself, you can make thousands of dollars / day.

Don't infringe my freedom to coerce vulnerable people!

Childish misuse of semantics.

Whenever you want to ban something, you pretend consent is really not consent.

"Vulnerable" is a blanket term for everyone whose autonomy you want to obliterate. It doesn't even matter that you're making them worse off, heaven knows you're not going to replace their income for them.

After all, self-righteousness is no much more fun when it's free (for you).

How about, its disgusting, immoral, and destructive of the common good?

"How about, its disgusting, immoral, and destructive of the common good?"

Jan's self-righteousness, you mean? Yes, it is indeed those things.

So you have no argument. You seem to think prostitution is largely not coercive, and that most people engaged in it are not vulnerable. You'd be wrong on both counts.

Heaven knows there's nothing government can do about anything that doesn't constitute infringement of your liberty--robbing you of your autonomy. Makes it much easier to not give a shit about people who might need a little protection or help.

Sure, prostitution is coercive, just like any other profession: People don't get money for free.

Incindentally, that's the whole point of money, otherwise it would just be pretty paper.

Sure, prostitutes are vulnerable, just like any other person. Violence exists, not just against prostitutes. Hint: That's how the police operate.

This doesn't mean you ban autonomy or throw consent out the window. All the money that is blown on criminalizing prostitution could be spent on protecting their rights like any other people. In fact, it would probably be cheaper because then you wouldn't criminalize an entire are of business but only the actual coercion.

Meh is right on the money in this thread.

In my humble town of Las Vegas, folks are washing their Benzes in the tears of coercion. The amount of people here (and, yes, worldwide) who are to some degree trading sexuality for resources is no trifling sum. Nor would we be doing them any favors to prohibit the trade.

Xaomi is putting in an excellent case for Village Idiot, now that some of the regular candidates seem to have wandered off.

Do you sincerely believe that "we could largely stomp out" the world's oldest profession, one that involves (generally) consenting adults and requires very little in the way of materials and expertise?

Per your comment below, what makes you think that "Prostitutes are always coerced"? That is not the message of many pro-"sex worker" feminists.

"Repeat offenders are good candidates for chemical castration."

You're trying too hard. The first rule of internet trolling is to be offensive enough without being too obvious.

If I understand you, you are advocating for a tougher version of what Sweden is doing. It is tough to find information on how, exactly, Sweden enforces the law against "johns" and Wikipedia mentions there were only 86 convictions handed out in 2008. I would imagine a serious effort at enforcement would involve fairly extensive undercover operations which would tend to take resources away from drug, organized crime and counter-terrorism investigations. Otherwise, the law raises all sorts of due process issues given how difficult it is to actually prove that one person explicitly induced another to engage in sex in exchange for money unless there is a recording, an email or another witness aside from the supposed prostitute. An unenforceable and unenforced law won't necessarily accomplish everything you wish for.

It's hard for Sweden to have a tough stance on prostitution, when it is perfectly legal in Denmark, a short train ride or ferry trip away.

I (unfortunately) foresee prostitution becoming prohibited as a result of growing inequality and the declining compassion the high-status and attractive feel for those at the bottom of society. If we, as a society, actually cared about poor women and girls (and boys) we could significantly reduce sexual frustration, STD prevalence, and violent crime by legalizing, regulating, and taxing prostitution. Prohibitionists are good candidates for chemical castration. Prostitution itself should be treated by the law like any other job, as prostitutes are human beings and have just as much agency as the rest of us. Pornography of consenting adults should be categorized as expressive speech and treated accordingly.

"Prohibitionists are good candidates for chemical castration." Agree; line of the day.

You actually just stated you think girls and boys (i.e. children) should be prostituted, which seems to be a common position for libertarians. I wonder what percentage of libertarians are pedophiles.

No, Qiáomài chāojí fěnsī stated prostitution should be treated like any other job, and child labor is currently illegal. Accepting child prostitution is not a common position for libertarians, even though it is probably marginally better than child starvation. Statistically, you can be sure most libertarians aren't pedophiles, but I wouldn't be surprised if the percentage is slightly higher than the base rate. After all, libertarianism is more attractive to those who don't share all the majority tastes. E.g. it's intuititve that there would be more homos, trans, etc. among libertarians as well, again compared to the base rates.

I think the crucial point still stands that, if you ban an income option, you have to compensate for it, or else people are going to be worse off.

You can certainly do this by taxing the rich as much as the Laffer curve allows, or by preventing the poor from being born in the first place (2-child policy?), but don't just pretend it's not a requirement. Unless you really don't care what happens to people and simply want your personal moral superiority boost, consequences be damned. And I fear that, given human hypocrisy, this is likely the default.

I wish her luck and trust her job search will have a happy ending.

"I don’t find the rape result intuitive"

Why not?

The rape result seems partially intuitive if it is small. If a certain number of disturbed people can act out their fantasies in a controlled environment with a sex worker, they may chose that over picking up a partner in a bar, getting her drunk, and then coercing her to have sex.

Right - I expect that if he is in a massage parlor the customer will know, or suspect, that if he tried to rob the girl or assault her there is a reasonable chance that there is someone in the next room who would hurt him rather badly. The "customer" has no such constraint when he has a girl by himself in a parked car in a dark alley.

A Columbian acquaintance once described to me the evening of his high school graduation. His father took him and his friends to a brothel where they spent the night cavorting with the ladies. He explained that in that culture, young men were very much discouraged from dalliances that involved impregnating the girls in his social set. They felt it made much more sense to satisfy their carnal desires with paid professionals than exploiting young ladies with perhaps unwished for results that could have a negative effect for generations.

Those who are concerned with the increasing number of illegitimate births in the country should realize that prohibiting prostitution is a factor in that increase.

Well sure, wasn't this how it was in Europe during and prior to the Victorian era? Gentlemen married virgins, but got plenty of sex from professionals before and usually after marriage.

This is certainly what I've been led to believe by Downton Abbey.

"unwished for results that could have a negative effect for generations"

Syphilis, gonorrhea, HIV/AIDS, HPV, herpes, chlamydia, etc are all potential "unwished for results that could have a negative effect for generations"

I'm surprised people "don’t find the rape result intuitive".

Here's an NBER paper about the Rhode Island "experiment" with decriminalizing prostitution.

Claiming to not find the rape result intuitive is just signaling that the speaker is on the right side of the feminist "rape is about power not sex" thing.

Either that or declaring that the speaker is profoundly naive about the world.

If we follow the recommendation of the paper, we should favor the quasi legal prostitution sector (indoors) vs the street kind by removing barriers to entry and perhaps relaxing law enforcement
This would reduce STD and rape.
I am concerned about the other externalities: sex trafficking/coercion and underage prostitution. She notes:

"As of 2012, there have been an estimated 4.5 million victims of sex trafficking and an estimated 2 million sex trafficking victims are children.18" .
Would quasi legal prostitution reduce these ? Would it make it more difficult for law enforcement to address it ? It seems that in countries where prostitution is quasi legal (Thailand) there is a lot of underage prostitution

As far as i know there is not much underage prostituition in Benelux. You have to take local circumstances into account. Lots of underage prostituition is unlikely to happen in OCDE countries, due to legalization. About the sex traffic concern its a simple equation: Wherever there are pockets of poverty there is sex traffic. So legalization or no legalization of prostituition wouldnt solve the problem, the real problem is POVERTY.

" the real problem is POVERTY."

Eliot Spitzer is a good example of the impoverishment of the sex industry. At least one of his suppliers seemed to be doing OK financially. Pockets of poverty don't have anything to do with prostitution, in fact some of the poorest places in the country don't have much of a prostitution problem, Appalachian coal country, the cut-over timberland of the northern tier of states, rural Arkansas, etc.

Seriously? Appalachian coal country has a prostitution "problem". It's just that the medium of exchange is either meth or close substitutes for meth (cases of coca-cola being a surprising one).

That would make the exchange barter, which is, in a way, the basis of the relationship between many married couples. The wife supplies sex in exchange for pizza, Guess jeans and a bed in a condo.

So it is only prostitution if it is for currency? What about if it is foreign currency? Commemorative gold coins?

"an estimated 4.5 million victims of sex trafficking and an estimated 2 million sex trafficking victims are children.18”

How is that estimate determined? Only a member of a culture that allows adolescence to continue into the third decade of life would describe an 18 year-old as a child. No doubt there are biological children that are being sexually exploited for profit but that doesn't necessarily make an 18 year-old whore a victim.

My bad copy and paste. She said "children". 18 was the footnote reference number as follows:

[ 18- International Labor Organization (2014), UNICEF (2005)]

Actually, there's evidence of elder abuse in prostitution, at least in this case:

Underage prostitution relies on staying out of the eye of the authorities.

If you make prostitution more legal it becomes more visible and it becomes harder for underage prostitution to operate. The same with sex trafficking foreign women. I will postulate that few men would prefer and seek out an underage prostitute or a sex slave rather than a adult American woman.

The answer to your question is yes. Note that prostitution is not technically legal in Thailand. It is, however, legal in Australia (indoors) and Canada(indoors, away from public view).
I would hazard to guess that child trafficking is similar to the rates in the US (where prostitution is illegal, except for Nevada)

Sadly, it seems most advocates of legalized sex slavery (known euphemistically as prostitution) don't care about the millions of children coerced into prostitution by pimps. I used to think advocates of legalized prostitution were just indifferent, but this comment thread strongly suggests they just want children to be prostituted to satisfy their own sexual incontinence.

Consider the alternative hypothesis that you might be an outraged idiot who doesn't comprehend the difference between sex and rape, as well as the existence and nature of obvious tradeoffs.

That seems a particularly uncharitable reading of the gist of the comments. No one as far as I can tell is arguing in favour of child prostitution, or coerced prostitution (so long as you are using the normal use of 'coercion' as in - compelling someone to do something they didn't want to do by threatening violence, rather than an oddly gerrymandered definition which seems to draw no distinction between those who choose, however reluctantly, to do something because it is economically the best choice available to them and those who do it only because of someone else's deliberate threats of violence).

What they are generally arguing is that the criminalisation of the (voluntary) trade (either on the supply side or the demand side) is likely to harm the people who have made the economic decision that sex work is their current best option, and not likely to have much effect on the involuntary trade, or at least, not enough to outweigh the harm to those engaged in it through their own choice.

If that claim is false, then by all means present your argument against it. I don't know personally where I stand - I'm open to the possibility that the externalities of a legalised sex industry could be worse than the harm caused to sex workers under a criminalisation policy - but there is no need to bulverise people like this.

And if you genuinely think there is no morally relevant difference between someone who doesn't particularly enjoy having sex with paying clients, but does it anyway because the money is much better than any other job they could feasibly get, and someone who only does it through threat of force, then you would need to argue for that as well.

Prostitution is not legal in Thailand -- there is simply a lot of corruption surrounding the industry. Google Chuvit Kamolvisit sometime. The Netherlands would be a better example to draw from given that prostitution really is legal and regulated there and that the country has a strong track record of good governance. I do understand that trafficking is still a problem there but I haven't heard of the trafficking problem extending to children.

IMO prostituition should be legal, as I think this is by far the best way of protecting women who chose or were obliged to take this path. On the other hand, pimps should be either tightly regulated or illegal, though I am not sure what would be the best policy here.

Massage parlors supposedly offer what is called a "rub and tug" which would seem to cut down on the STD's.

The paragon of pragmatism - Singapore - seems to have figured out these ideas long ago. Both massage parlours and brothels are quasi-legal. I guess they had no option given the large number of single men living in and visiting Singapore.

But, should this be legal?

"I don’t find the rape result intuitive"
Change the commodity from sex to food: If you can't buy food and no one will share their food with you, you'll steal food. Making prostitution illegal and very difficult to find puts men who aren't attractive to women in a similar bind. So you make it easy to buy with the result that many of the would be sex 'thieves' buy instead.

Of course you have to abandon the ludicrous "rape is not about sex but about power" cliches that are ritually mouthed upon pain of expulsion at our institutions of "higher" "learning".

That doesn't actually make any sense; if it was just about attaining sexual release there is this thing called masturbation. Rape is not necessarily about power, but it is fundamentally about a sadistic desire to harm the vulnerable (just like rape).

The Catholic church is a massive and blameless institution built on the excellent morals of people like Xioami. I do have to give credit for the line pointing out that rape is just like rape.

Can we please admit that using the internet is no longer a "novel" form of research? Seems like half these papers are "so I googled this and here are some wild extrapolations I've drawn from what I found."

You should have counterpointed this article with a link to the story about Greek prostitutes working for sandwiches.

Raise the relatively low barriers to entry for massage parlors this will decrease the growing number of them, this will create a domino effect and lower the rates for sex trafficking, sexual violence, and sexually transmitted diseases. High barriers to entry will stop many future parlors from entering the market putting a pause to all of this.

The rape result is not surprising, rape in the US is an extremely antisocial activity, and so rapists naturally tend to be unsocialized individuals, men who cannot find sex through social contact because they cannot process normal social interactions with women. Some rapists will still prefer to engage in coercive sex for its own sake, but many others will find transactional sex an acceptable and less risky alternative.

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