Demand for sexual services might be inelastic to both the market price & the implicit price of stigma; criminalization is not likely to be conducive to decreases in demand as is hoped for; rather, it worsens working conditions & safety

Quashing demand or changing clients? Evidence of criminalization of sex work in the United Kingdom. Marina della Giusta, Maria Laura di Tommaso, Sarah Jewell, Francesca Bettio. Southern Economic Journal, September 21 2021. https://doi.org/10.1002/soej.12532

Abstract: The use of regulation of sex work is undergoing sweeping changes across Europe and client criminalization is becoming very widespread, with conflicting claims about the intended and actual consequences of this policy. We discuss changes in demand for paid sex accompanying the criminalization of prostitution in the United Kingdom, which moved from a relatively permissive regime under the Wolfenden Report of 1960, to a much harder line of aiming to crack down on prostitution with the Prostitution (Public Places) Scotland Act 2007 and the Policing and Crime Act of 2009 in England and Wales. We make use of two waves of the British National Survey of Sexual Attitudes and Lifestyles (NATSAL2, conducted in 2000–2001 and NATSAL3, conducted in 2010–2012) to document the changes in both the amount of demand for paid sex and in the type of clients that have taken place across the two waves, and their possible implications for policies that frame prostitution as a form of crime.

5 CONCLUSIONS

As economists, we believe that public policy ought to be based on relative welfare considerations. In other words, under which arrangements are the actors, and the public, better off? As more countries follow the model of criminalization it will become possible to have a more careful assessment of its effects on welfare, but the case for it is certainly not clear cut. Criminalization typically hopes to quash demand, but the evidence is mixed, and ours, though not causal, not supportive.

Poor responsiveness of demand to deterrence—in our case criminalization of clients—is contemplated by different theoretical approaches but leads to similar policy indications. In the stigma model we used for our investigation, the final impact of criminalization on demand may be modest, if negative, depending on the distribution of clients with respect to risk and the resulting, aggregate elasticity of price with respect to stigma.

According to Lowenstein (Loewenstein, 1996; Loewenstein, 2000), so called “visceral factors” may be responsible for poor responsiveness to deterrence of the supply of acts made illegal—buying sex in our case. Loewenstein has long drawn economists' attention to the influence on behavior of “visceral” factors, namely immediate emotional experiences such as anger, fear, thirst, hunger, or sexual desire. The author argues that such factors have been traditionally discounted by economists, but in “hot” states, where visceral factors are operative, individuals “who otherwise display ‘normal’ decision-making behavior… behave in ways that give the appearance of extreme discounting of the future” (Loewenstein, 2000, p. 430, quoted by Cawley & Ruhm, 2011, p. 62). Ghasemi (2015) reviews 15 empirical studies on differential responsiveness to deterrence and finds confirmation that the response is significantly weaker for “crimes” where visceral factors play a stronger role. In the studies reviewed by Ghasemi, the crimes seen to be more affected by visceral factors are murder and assault (versus, say, property crimes) but buying sex would also fit this category. The author argues that in these cases prevention, not deterrence should be considered by policy makers.

Becker's rather different theoretical framework leads to not too dissimilar suggestions. In his original model on crime and punishment (Becker, 1968), sensitivity of crime supply to deterrence is captured by two elasticities respectively measuring how the amount of punishment and the probability of apprehension (and conviction) vary in response to variations in the number of offenses. If the supply of crime is inelastic in both respects, deterrence will not maximize social welfare. In the case of criminalization of prostitution, this obtains if risky clients of prostitution have a low elasticity to the amount of punishment and/or try to reduce the risk of apprehension and conviction by moving to secluded locations.

Becker returns to the same point with a later model, co-authored with Grossman and Murphy (Becker et al., 2006) where the government optimizes expenditure to curb supplies of illegal goods and services by maximizing a welfare function that depends on the difference between the social and private values of consumption of the goods made illegal. In the model, optimal expenditure also depends on the elasticity of demand for these goods, and the implication is that, if demand is inelastic, it does not pay to make goods illegal, unless important, negative externalities make their social value negative. Using this argument and producing evidence of low demand elasticity, Cunningham and Finlay (2015) recently questioned the effectiveness of interventions aimed at methamphetamine input markets.

In this line of reasoning it would still pay to make goods illegal if important negative externalities were involved, and in the case of prostitution, violence might be seen as one such externality. We would argue, however, that violence may increase with criminalization, not the opposite. Sex workers, or prostitutes, face risks to their health, risks of violent assault, and risk of fraud (not getting paid for their services). Clients face also health risks, reputational risks and, where prostitution occurs in criminal environments, risks of violence too. These risks are going to be higher where prostitution is criminalized, partly because criminalization makes collaboration with both medical personnel and law enforcement more difficult. Criminalization of sex work also makes the detection of under-age or trafficked people more difficult. For both clients and for sex workers, demand-side and supply-side, criminalization pushes the market into secluded and, for the workers, isolating places. Flats, clubs and massage parlors are more separate from the rest of society. The welfare of sexually trafficked women decreases in these dangerous environments. Our analysis of the move towards criminalization in the United Kingdom suggests that this has not decreased demand and possibly changed the profile of clients in ways that may worry those who are concerned about the welfare of prostitutes as well as public health. By and large, clients of sex workers tend to be risk-takers. There is a high correlation between paying for sex and engaging in other risky behaviors. To some of these men, criminalized prostitution is actually more attractive than decriminalized or legal sex work, and these are not the ones we necessarily want to encourage.