Why do high-end prostitutes make so much money?
Have I mentioned that Eric Barker is awesome? Many of you should be reading his blog. Yesterday he brought us this account, with the source paper here:
Edlund and Korn [2002] (EK) proposed that prostitutes are well paid and that the wage premium reflects foregone marriage market opportunities. However, studies of street prostitution in the U.S. have revealed only modest wages and considerable risks of disease and violence, casting doubt on EK’s premise of an unexplained wage premium. In this paper, we present evidence from high-end prostitution, the so called escort market, a market that is, if not entirely safe, notably safer than street prostitution. Analyzing wage information on more than 40,000 escorts in the U.S. and Canada collected from a web site, we find strong support for EK. First, escorts in the sample earn high wages, on average $280/hour. Second, while looks decline monotonically with age, wages follow a hump-shaped pattern, with a peak in the 26-30 age bracket, which coincides with the most intensive marriage ages for women in the U.S. Third, the age-wage profile is significantly flatter, and prices are lower (5%), despite slightly better escort characteristics, in cities that rank high in terms of conferences, suggesting that servicing men in transit is associated with less stigma. Fourth, this hump in the age-wage profile is absent among escorts for whom the marriage market penalty is lower or absent: escorts who do not provide sex and transsexuals.
Excellent, but I do find some problems in that account. As for the fourth point, who ever said: "Don't worry ma, she's a sweet girl, she's only serviced the conference trade!"? Maybe, in "crossroads" cities, sexual mores are looser in some other way, as a greater supply of the free product than you will find in Topeka. As for the third point, can't it simply mean that conference men (even assuming that is indeed the relevant characteristic of the city) get really drunk and don't care much about the age of the woman? On the second point, isn't that "hump-shaped pattern" probably driven by demand rather than supply? If you wish to claim it is driven by supply, you need to postulate that women in the 26-30 bracket are mainly competing against each other, rather than say 20-25 year-olds. Is that true?
Act now
Nearly 55,000 Haitians have been approved for family visas but are on waiting lists to enter because Congress has set limits on how many may come each year, the State Department says.
There is more information on Haitian immigration here.
A betting market for the health care plan
It opened not long ago, find it here, as I write it's at 33.9 for passage before July and it has been rising from 20 or so. Bernanke, by the way, is back up to 93.
Some problems they are having in Haiti
1. Since many financial institutions are closed, transport is difficult, and people don't all have their papers (fear of theft also may be an issue), it is almost impossible to receive remittances, which account for more than one-quarter of the country's gdp.
2. The current makeshift shelters are not robust to rain and storms and the rainy season is starting in May. Rain also brings a greater risk of various diseases.
3. The price of food keeps on rising. It was already the case — before the earthquake — that poor people commonly ate mud cakes as a source of nutrition. 54 percent of Haitians live on less than one dollar a day.
4. The party with the ability to make things happen — the U.S. military — isn't formally in charge and is sensitive to bad publicity.
5. In the Darfur crisis, eighty percent of the fatalities came from disease and disease has yet to begin in the Haitian situation.
6. There are already 150,000 accounted-for dead and many more uncounted.
7. It's by no means clear that the aftershocks are over and there is even some chance of a bigger quake to come. This also discourages aid efforts and the construction of more permanent shelter.
8. Outside of some parts of Port-Au-Prince and immediate environs, external aid is barely underway yet damage is extensive.
9. It is not clear that the upcoming planting season — which starts in March — will proceed in an orderly fashion. One-third of the country's population is living at loose ends and most of the country's infrastructure is destroyed. For the planting season many Haitian farmers need seeds, fertilisers, livestock feed and animal vaccines. That planting season accounts for sixty percent of Haiti's agricultural output.
10. Before a limb can be amputated, some doctors have to first go to the market and buy a saw.
Those aren't the only problems.
Assorted links
1. Markets in everything: "Miracle on Hudson" plane is for sale.
2. Early risers are more proactive.
3. Another song about Paul Krugman.
Why Bernanke should be reconfirmed
Jim Hamilton nails it. Excerpts:
Please permit me to suggest that intellectual stamina is the most important quality we need in the Federal Reserve Chair right now.
And:
How could there possibly be an alternative whom Barbara Boxer (D-CA) and Jim DeMint (R-SC) would both prefer to Bernanke?
Elsewhere I have to strongly differ with the Johnson-Kwak proposal that Paul Krugman be selected. I don't intend this as a negative comment on Krugman, if anything I am suggesting he is too dedicated to reading and writing and speaking his mind. The Fed Chair has to be an expert on building consensus and at maintaining more credibility than Congress; even when the Fed screws up you can't just dump this equilibrium in favor of Fed-bashing. What lies on the other side of that curtain isn't pretty. Would Krugman gladly suffer the fools in Congress? Johnson and Kwak are overrating the technocratic aspects of the job (which largely fall upon the Fed staff anyway) and underrating the public relations and balance of power aspects. It's unusual that an academic will be the best person for the job.
I also have to put the kibbosh on plans which postulate Bernanke as failing to receive reconfirmation but staying on the Board and letting Donald Kohn slide into the de fact #1 slot and everyone working together as before. That's just not how things work. Bernanke would more likely leave, plus outsiders would not know who was in charge or what the default was if the cooperation should break down. The resulting reputational equilibrium would again prove unworkable or at least highly disadvantageous.
Overall when I read these discussions I realize that my theories of public choice are very, very different from those of some of the other commentators.
Words of wisdom
You could construct a whole blog of mishnah on Scott Sumner, but no, I cannot link to every post he writes. Nonetheless I especially liked this passage:
If our banking system absorbs trillions in losses you can be sure the government will step in, regardless of whether we have big banks or small banks. And if our banking system isn’t in crisis, then FDIC is perfectly capable of handling an isolated bankruptcy, even at a large bank. In any case, I can’t imagine a future where the US doesn’t have any large banks, but Europe, China, Japan and Canada have lots of large banks. Can you? Wouldn’t it make more sense to try to prevent the banking system from suffering trillions in losses after a bubble bursts, perhaps by requiring sizable downpayments?
But then I read that the FHA is about to set much tougher standards for FHA mortgages–they plan to require borrowers with a 590 credit score to put down at least 3.5% downpayments. As Tyler Cowen recently argued, you knew Congress wasn’t serious about global warming when they refused to make Americans pay more for gasoline. And I would add that you can be sure that the populists who want to “re-regulate the banking system” aren’t serious when all they can do is talk about 3.5% downpayments for bad credit risks. It is so much more fun to bash big banks.
Assorted links
1. New talk of principal writedowns.
2. How do women bargain differently?
3. It's hard to aid Haiti without infrastructure.
4. The Institute for Unethical Studies.
5. Good account of Haiti, before and now.
6. Turing tests, in a Chicago theatre.
Free Hearing
Who gets the right to free speech is a status marker and disputes over this right a status game, so argues Robin Hanson:
The usual rationale for “free speech,” which seems persuasive, is that in the long run we as a society learn more via an open competition for the best ideas, where anyone can try to persuade us as best they can, and listeners are free to choose what to hear. Yet that concept would best be called “free hearing” – a freedom to hear and evaluate any case presented, based on any criteria you like (including cost).
“Free hearing” would apply not just to hearing from adult citizens in good standing, but also to hearing from children, convicts, corporations, robots, foreigners, or demons. We wouldn’t argue if corporations have a right to speak, but rather if we have a right to hear what corporations have to say.
But in fact we have “free speech,” a right only enjoyed by adult citizens in good standing, a right we jealously guard, wondering if corporations etc. “deserve” it. This right seems more a status marker, like the right to vote, than a way to promote idea competition – that whole competition story seems more an ex post rationalization than the real cause for our concern. Which is why support for “free speech” is often paper thin, fluctuating with the status of proposed speakers.
There are other explanations for our focus on free speech rather than free hearing such as it’s the speech makers who are easiest to punish and control (being so many smaller in number than the speech hearers) but Robin’s point remains characteristically insightful.
Haiti fact (?) of the day
Is it possible that now almost eight percent of Haiti's population consists of orphaned children? Reliable data are hard to come by but this one estimate suggests it might be true. (Current living population is maybe 9.5 million (?), with the number of orphans estimated at 750,000.) It is also the case that the Haitian government seems reluctant to let these children be adopted abroad, in part because it is difficult to tell which children are truly orphaned.
Addendum: Here is one estimate.
Markets in everything
At first I thought this was a joke and perhaps it is still just a marketing ploy. Nonetheless it seems to exist:
If requested, a willing staff-member at two of the chain's London hotels and one in the northern English city of Manchester will dress in an all-in-one fleece sleeper suit before slipping between the sheets.
"The new Holiday Inn bed warmers service is a bit like having a giant hot water bottle in your bed," Holiday Inn spokeswoman Jane Bednall said in an emailed statement to Reuters.
The bed-warmer is equipped with a thermometer to measure the bed's required temperature of 20 degrees Celsius (68 Fahrenheit).
Holiday Inn said the warmer would be fully dressed and leave the bed before the guest occupied it. They could not confirm if the warmer would shower first, but said hair would be covered.
Florence Eavis, Holiday Inn spokeswoman told Reuters that the "innovative" bed-warming method was a response to Britain's recent cold weather and marked the launch of 3,200 new Holiday Inns worldwide.
She could not explain why the beds were not being warmed by hot water bottles or electric-blankets, but admitted the human method was quirky.
Holiday Inn are promoting the service with the help of sleep-expert Chris Idzikowski, director of the Edinburgh Sleep Center, who said the idea could help people sleep.
The link is here and another version of the story is here. I thank Amit Varma and Craig Stroup for the pointers.
How signals work on the dance floor
Here is some new research:
The results showed that women gave the highest attractiveness ratings to men with the highest levels of prenatal testosterone. The men with the lowest testosterone in turn got the lowest attractiveness ratings. "Men can communicate their testosterone levels through the way they dance," Lovatt told SPIEGEL ONLINE. "And women understand it — without noticing it."
In women, the link between dancing style and testosterone levels were similar — but the reaction of men was just the opposite. Dancers with high levels of testosterone moved more parts of their body, with their movements being somewhat uncoordinated, while those with lower testosterone made more subtle movements, especially with their hips. The male students found the latter style most appealing…
The men who got the female students hot under the collar danced with large movements which were "complexly coordinated." But it's a fine line between hot and not, however: Those men who made big moves but who were less coordinated came across as dominant alpha males — and were unlikely to win women's hearts. The researchers also found that the size and complexity of the dance moves decreased in parallel with testosterone levels.
The full story is here and the article is interesting throughout. This bit on the researcher caught my eye:
Lovatt knows his subject matter well — he himself was a professional dancer until the age of 26. He performed in musicals in large venues around England and also worked on cruise ships. The thought of an academic career barely entered his head at the time. He wasn't even able to read until he was 23, having left school without any qualifications. When he looked at a page in a book, "all I saw was a big black block."
Assorted links
What is not right in this picture?
How might you improve access to scientific research? Write an editorial calling for greater access…and then put it behind a paywall.
Hat tip goes to Michelle Dawson on Twitter.
Addendum: Registration suffices, you don't need to pay, my apologies!
Speech Balloons
Here from Maya Sen are speech balloons illustrating the importance of various words from the majority and then dissenting/concurring opinions in Citizens United v. FEC (more frequently used words are larger). It's interesting to me that just looking at the balloons I can tell which side was more concerned with the Constitution and which side was more concerned with a particular view of the ideal polity.
See Bainbridge for a much more complete roundup of the issues.