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Pricing Personal Services: An Empirical Study of Earnings in the UK Prostitution Industry
Author(s) -
Moffatt Peter G.,
Peters Simon A.
Publication year - 2004
Publication title -
scottish journal of political economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.4
H-Index - 46
eISSN - 1467-9485
pISSN - 0036-9292
DOI - 10.1111/j.0036-9292.2004.00327.x
Subject(s) - earnings , wage , differential (mechanical device) , economics , econometrics , service (business) , labour economics , accounting , economy , engineering , aerospace engineering
The hedonic pricing method is used to investigate the way in which the prices of prostitutes' services are determined. The data used in the analysis are extracted from an internet site, each observation being based on a report submitted by a client. The factors affecting price are identified in a regression framework, and combined with other information to provide estimates of the earnings, both aggregate and individual, for a sub‐sector of this underground service industry in the United Kingdom. Comparison of these earnings' estimates with data on earnings from alternative employment then allows us to estimate the compensating wage differential, and also to verify the theoretical prediction that prostitutes' earnings are positively related to earnings from alternative employment.