*An Economist Walks into a Brothel*

That is the new Allison Schraeger book, the subtitle is And Other Unexpected Places to Understand Risk, and here is one excerpt:

In many ways, the brothel is like any other workplace.  There are weekly staff meetings (in a departure from the tradition at most companies, the women often wear outlandish hats and drink tea), access to financial advisers, performance bonuses, and even corporate housing…

But where Hof [the owner-manager] provided value was by reducing risk for both buyers and sellers of sex.

The top-earning woman at that brothel pulls in about $600,000 a year, and about half of that goes to Hof.  And to audition for the brothel, women have to invest about $1500 in upfront costs (travel, clothing), with no guarantee of a job at the end of the process.

Here is an NPR interview with Allison.

Comments

They need a Lambda School for hookers. Use equity to finance instead of debt. The $600k woman makes only $150k after paying half to the pimp and half again to Uncle Sam.

It is unfortunate that the American model of any type of business involves paying outsized sums to middle men. Like insurance companies in healthcare or banks in corporate finance. Or try renting an apartment in NYC. These brokers sure know how to pimp the masses.

"...where Hof provided value...'

Pimpin' ain't easy, son. Is hard out here for a pimp.

Middle men are now the problem? Maybe. Check out how much aid to needy people ends up in the hands of others rather than the needy.

Income tax on $300,000 would be $78,689 leaving $221,311. At a wild guess if 5% of what's left goes on local taxes that still leaves over $210,000.

Don't forget social security taxes. I assume these are independent contractors - self employed. That would cost an additional 12.5 percent on the first $133,000 of earnings, plus another 2.9 percent on total net earnings.

And that's before deductions. Think about what an independent contractor hooker can deduct: birth control, makeup, clothes, gym membership?

'In many ways, the brothel is like any other workplace'

Sounds like Nevada has yet to discover the joys of a normal brothel model in Germany, where apparently each prostitute is an independent contractor simply renting space to ply their trade.

And there is no need to audition for the person renting the space - you simply need to pay the fee. Of course, since prostitution is legal in Germany, most people involved in the business do not seem to worry about a 'job guarantee' to be allowed to ply their trade in a generally reasonable fashion.

Let's see if this gets past the filters - there is an English language description available, and apart from the room price, no need for an economist to do anything but read - https://www.erospark-karlsruhe.de/erotik-jobs-munca/ And they allow pets, amusingly.

(And for the endlessly curious - advertisements for brothels are legal, and there was an ad on a van near the Mann Mobilia at the A5 maybe a year ago. The German word 'Laufhaus' was new to me, and a bit strange - 'walk house' is the basic literal translation. On the other hand, the ad was not exactly subtle in the sense that 'FKK Club' ads are not exactly subtle either. Still have never seen the word ever used anywhere else . And now reading wikipedia, it seems as if this model is not possible in the U.S. - basically, it is like the red light district in Amsterdam. I assume this place is in the Karlsruhe red light district, which probably has 50? 100? prostitutes working at any normal time.)

In this state in Australia prostitution is legal but there are no brothels. You basically wouldn't know prostitution existed unless you went looking for it. Other states have brothel systems. This can lead to prosecution of sex workers that ply their trade outside of the system, which doesn't seem a great way to run things.

so "Black Market" businesses operate much like normal businesses and economic basics also apply. A stunning revelation, not.

Consumer demand sparks & sustainns markets, even under severe long term government oppression.
The Oldest Profession.
How'd that American Alcohol Prohibition program work out ?
American Drug War has been and is a spectacular failure.
Let's ban vaping, guns, and fossil fuels.
They never learn.

No need to preach, libertarian. Hof's Love Ranch is located in Nevada where prostitution is legal but restricted to certain parts of the state.

you seem quite familiar with " Hof's Love Ranch " in remote Nevada.

is that your proof that prostitution black markets do not exist generally in the U.S. ?

Already covered in Brothel, by Alexa Albert (a medical doctor), who conducted enthography at Mustang Ranch in Nevada (Ballantine Books, 2001). It wasn't specifically about Risk, but if you are talking about condoms and prices with and without them, then you are implicitly talking about Risk and valuation.
Presumably the new book adds something, others will have to decide.

Such is life in Trump's America.

Only beta male cucks pay for sex. Real men know how to manipulate women into having sex for free.

Yeah, but if you want four of them in the same bed with you, all with KGB uniforms and Nancy Pelosi wigs, you're gonna have to pay. I don't care who you are.

How much did it cost?

lol. That does sound pretty specific.

Silly man. You’re not paying for sex: you’re paying her to leave right after.

Or to make sure she doesn't talk. Unless you are Trump, of course.

Where escorts are concerned, the matter of confidentiality—she, for example, may be a single parent with primary custody and a day job; he, for is part, is often married—is an interesting topic.

One of the major reasons for the Puritan invasion of North America was to escape the virulent prostitution of 16th century London. The "City on the Hill" could not support that vice. Centuries later we're still toeing the Puritan line in supposedly enlightened times.

You call this an economics site!? I'm shocked.

Ms. Schlagger could dig deeper. I wasted some of my life in West Germany during the Cold War. It may have been a GI urban legend. There supposedly was a place called "Arabella Haus,' which was a whore house operated by a corporation traded on a German stock exchange. I think (I was drunk most of the time - Class 6 store booze and German bier were less expensive than coca cola) some of us went there once. It could have been in Karlsruhe. Way too expensive. Vietnam was comparatively economical. They (I never did it) worried the papa-san/brother/husband were VC and there was that island where they sent the swinging dicks that contracted the incurable VD . . . risks.

Ever thought of penning your memoirs ?

Yes, on the shit house wall.

Long I had dreamt of penning a Broadway musical. But, I can't write music and some rat bastard stole my title, "Hamilton."

The truth is stranger, but not as ludicrous, than the academy.

"Some people come here to sit and think
and write up on the walls.

I come here to sit and shot
and scratch my hairy balls."

Duck the Butcher

shit, not shot

Damn android device...

Seen on the wall of a pay toilet.

"Here I sit broken hearted.
Paid to shit.
But, only farted."

An economist walks into a brothel.

The Madam asks, "What's your pleasure?"

The economist responds, "What are the prices?"

Madam says,

"I have this computer model which reveals preferences at various price points. And, I give discounts for a bundle, and you get frequent flyer points as well.

You see, I am an economist also."

Later, the economist left the establishment fully optimized.

With no consumer suplus.

Efficient! But it is unclear whether or not we reached the social maximum, since there is nothing in your description which demonstrates the customer might not have departed with unmet demand which could have been satisfied above marginal cost.

Economics is the social science of turning nations into brothels.

"But where Hof [the owner-manager] provided value was by reducing risk for both buyers and sellers of sex."

Afaik, in Nevada only brothels are legal, not independent prostitution [an old article about that - http://bayswan.org/Laura.html]; perhaps this is also part of the "value" that Hof creates - being legal?

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