Open AccessDoes Competition Eliminate Discrimination? Evidence from the Commercial Sex Market in Singapore
Author(s) -
Li Huailu,
Lang Kevin,
Leong Kaiwen
Publication year - 2018
Publication title -
the economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 4.683
H-Index - 160
eISSN - 1468-0297
pISSN - 0013-0133
DOI - 10.1111/ecoj.12476
Subject(s) - monopoly , competition (biology) , willingness to pay , price discrimination , taste , economics , diamond , charge (physics) , business , demographic economics , microeconomics , psychology , chemistry , physics , organic chemistry , quantum mechanics , neuroscience , ecology , biology
The street sex worker market in Geylang, Singapore is a highly competitive market in which clients can search legally at negligible cost, making it ideal for testing Diamond's hypothesis regarding search and monopoly pricing. As Diamond predicts, price discrimination survives in this market. Despite an excess supply of workers, but consistent with their self‐reported attitudes and beliefs, sex workers charge whites (Bangladeshis) more (less), based on perceived willingness to pay, and are more (less) likely to approach and reach an agreement with them. Consistent with taste discrimination, they avoid Indians, charge more and reach an agreement with them less frequently.