THE ECONOMICS OF HIGH-END PROSTITUTES
SUPPLY AND DEMAND | April 10th 2008
mistress_f/Flickr
What skills can earn a woman $5,500 an hour? Still reeling from Eliot Spitzer's surprise bouts of discretionary spending, Allison Schrager examines the supply and demand of high-end call girls ...
Special to MORE INTELLIGENT LIFE
Among the many things we are left to consider in the wake of the Eliot Spitzer scandal, there is one I still can't quite get over: the staggering price of a high-end call girl. What service can anyone provide to justify up to $5,500 an hour?
Although sex is a unique commodity, it must still obey market principles of supply and demand. In a post last year on Free Exchange, The Economist's economics blog, I wrote about how the prostitution market is exceptionally sensitive to large fluctuations in wealth and expectations, and so it might be considered a lagging indicator. I mentioned that while most people consider it an extremely undesirable job, on the high end "it can be quite lucrative and requires few skills (though a fair helping of unequally distributed natural endowments)."
"Inferior skills?", commented someone under the name "spairme". "Obviously, you have not visited one...To be able to command premium pricing an [sic] any market, a service must be superior."
Both spairme and Spitzer left me curious to learn more about the economics of the world's oldest profession.
The demand side:
What explains the enormous income gap between high-end prostitutes and ordinary streetwalkers or even typical working women? I decided to conduct a rather unscientific survey of potential consumers in an airport executive lounge. In conversations with several men--a professional athlete and several business executives--I asked why it was more attractive to pay a premium than to solicit a woman on 11th Avenue, say. They all responded with groans and wincing. "That is just sick and sleazy," one man said, nearly shivering with disgust. "You could end up bringing home all sorts of diseases to your wife and it could be dangerous." Everyone hastened to clarify that these answers were based on hunches, not experience.
It seems purchasing sex is like buying shellfish: it should come from a reputable provider. Meeting a woman in a clean, well-kept environment signals higher quality and lowers the risk of an infection substantially.
Some argue that such no-strings transactions are ultimately less harmful to both career and marriage than taking a mistress. The men at the airport lounge also pointed out that the premium buys discretion. But at these prices, it is difficult to avoid a paper trail. Spitzer spent more than $80,000 on high-end prostitutes in one year. That's a lot of bank withdrawals.
On the website of the service Mr Spitzer patronised (which has since been disabled), escorts were ranked with twinkly diamond ratings; higher rankings demanded a higher price. Given that the women all looked equally beautiful and delivered similar promises, I couldn't help but wonder what gave them their value. A colleague with some experience arranging escorts for clients (when he worked at a rather nefarious-sounding private-equity firm) explained that a higher price often meant that a woman was either especially talented and versatile (ie, would provide a wider range of services), or simply more popular and experienced. I had been under the impression that this was a job in which seniority was undesirable. It depends on the woman, he said, just before emphatically denying ever using a call girl himself.
As with all things, a premium price signals quality. Men who seek out high-end prostitutes may question the value of a bargain. The industry feeds their narcissism (hence the name "Emperors club VIP"), and part of the fantasy is feeling special enough to purchase that multi-diamond woman.
The supply side:
The most obvious reason why high-end prostitutes can charge so much is that they are doing something illegal. Being arrested for prostitution will certainly hinder future earnings prospects in other industries (unless one manages to write a juicy tell-all about the experience; still, how many such books can the market support?). A premium fee is justified by the risks involved in working in an illegal industry, as well as the related stigma of being paid for sex.
In the paper "A Theory of Prostitution", published in 2006 in the Journal of Political Economy, economists Lena Edlund and Evelyn Korn suggest there is a marriage market explanation behind why prostitutes are so well-paid:
[A] woman cannot be both a prostitute and a wife. Combine this with the fact that marriage can be an important source of income for women, and it follows that prostitution must pay better than other jobs to compensate for the opportunity cost of forgone marriage market earnings.
According to the Emperor's Club (defunct) website, the women they provide not only possess exceptional beauty, but also intelligence and sophistication. Some, the company went on to say, are successful professionals in other high-profile industries. Though this last claim seems dubious, the women must be exceptionally attractive and sufficiently intelligent to hold a customer's attention. Unlike their low-end counterparts, high-end call girls are expected to supply some level of companionship, and often accompany clients to dinners or parties. Because a beautiful and intelligent woman inevitably has other job (and marriage) options, a very high wage is necessary to encourage them to forgo other opportunities, and risk arrest, disease and shame.
While $5,500 and hour may sound high, not all of that goes to the woman. A substantial amount goes to the escort service itself. And escorts must spend a great deal maintaining their value without immediate compensation. Much time and money is spent on grooming: hair removal, expensive hair-cuts (one stylist I spoke to claims several of his clients are escorts, who spend at least $1,000 a month on extensions and colour) and regular exercise. Many women have had plastic surgery (particularly if they were once men) and maintain an expensive designer wardrobe. Frequent visits to the doctor are necessary to protect against sexually-transmitted diseases.
Ultimately, the decision to become a high-end prostitute is often not only an economic one, but is determined by a woman's attitude toward sex. For many women no amount of money would ever entice them into prostitution. You cannot deconstruct the economics of selling sex without acknowledging that, sadly, many women who enter the trade, even at the high end, have at some point in their lives been victims of abuse. Economic reasoning has little sway over how a woman values her body.
The market for sex ultimately determines a price like any other industry. Sex was one of the first goods ever traded. It commanded a price even before the days of shell companies, complex money-laundering schemes and diamond rankings. I look back on my post from a year ago and recognise my ignorance: high-end prostitutes do have a unique skill-set.
As spairme noted:
An unskilled and unenthusiastic provider (ie, acting skills) is not going to last long..... It's not just about being born beautiful and laying there like a beached starfish!
(Allison Schrager is an economist based in New York.)
Email this page
Delicious
StumbleUpon
Facebook
Comments
Australian prostitutes can
May 23, 2008 - 07:24 — Shannon (not verified)Australian prostitutes can very, very rarely charged that much unless they work privately. Having worked in the industry for 3 years in Sydney, for several agencies, I've found that the maximum price tends to be 1,000 per hour but is usually less. And yes, I am very attractive, have a Bachelors degree and am currently completing my postgraduate studies so these comparatively low prices do reflect the fees for "high class" girls.
I agree with that, as with
June 28, 2008 - 16:41 — Paul Nis (not verified)I agree with that, as with any industry there is an array of different levels.
The extent to that in the escort industry is a little crazy though. The media can't even get their heads around the HDH concept assuming that $300/hr is as high as it gets.
Have you found what you're looking for?
July 3, 2008 - 15:05 — Phil (not verified)Fascinating discussion and article. Thank you.
Not specified in the article or in the discussion is the significance of addiction in such matters.
Without an open acknowledgment that for many, perhaps most, involved in prostitution are craving for something more in life, we are not being honest.
The folks who commented, or shared testimonials about the significance of acceptance, loving, and caring for a person, even in that moment, are touching on the heart the matter.
As has been said, "the heart of the matter is the matter of the heart."
Someone pointed out, and I disagree, that if we just legalized and regulated the sex industry all the problems would go away.
This is well-intentioned, I believe, but naive. Laws don't change people, nor do regulations.
My brother-in-law, an anthropology major from Harvard, and now a pediatrician, once observed that "rules are for fools."
In a way, he's right. What can a law do that the heart can't?
I love what Chesterton said: "Every man who knocks on the door of a brothel is looking for God."
High prices are partly
July 4, 2008 - 14:57 — Visitor (not verified)High prices are partly driven by the class of girls and partly by the nature of the clients and their demands. Men in high places have a lot to lose, just look at Spitzer. Privacy concerns and the whole organization are much more important to them than to the average person. Higher standards are obviously costly. It's called VIP for a reason.
I assume that rule -- 'no
July 13, 2008 - 13:05 — Visitor (not verified)I assume that rule -- 'no more than twice every three months' -- is based on the average frequency of how often Britons have sex?
There isn't a single woman
July 18, 2008 - 10:38 — Visitor (not verified)There isn't a single woman on the face of the earth who is worth $5500 an hour. Any raving imbecile who wishes to impart that amount of paper for a one hour woman hole is most welcome to do so.
All women are, after all, whores anyway. All women are selling sex for a return of perceived value in kind or some other such emotional stock. Women are here to be played like pawns, they are not being played if they are so easily allowed to empty both your balls AND your wallet.
I'm curiuous to know about
August 15, 2008 - 01:20 — JaneDoe (not verified)I'm curiuous to know about your physical attractivness. It seems you have the mental game locked down, do you also have the physical attractivness? Or is your mental game so strong your looks are not important?
My Wife is a prosititute
December 1, 2008 - 18:44 — Visitor Dennis (not verified)Some women are very open to sex with others for money. My wife has been working at it for over 25 years and loves it. She can't wait to get home and tell me how her trip had gone. She is now working two weeks a month as a sex slave and makes $40,000.00 plus. She has been to many countries and meets very interesting people. She wishes she had done this sooner.
Why the price?
January 16, 2009 - 08:52 — Rob (not verified)So why do these men pay these high prices? I think the high price in itself is a reason. If one has the money one would go for exclusivity and it is not availability but price that guarantees exclusivity. In other words if you want a prostitute that is not available to everyone, you go for one that sells for $5000 an hour. But then of course you would expect something special and that is what a prostitute needs to provide in order to get repeat business. Hence beauty, high education and high quality of service.
On the other hand try finding a well educated and stunningly bueatiful and pleasant woman (hard in itself) who is prepared to sell the required services? I guess they ar not readily available at your local grocery.
In closing, I am suprised to read such an unsubstantiated remark as "been victims of abuse". Rather sounds as if the writer disapproves of prostitution and has need of a way of putting prostutus down.
http://swiha.edu
January 19, 2009 - 17:10 — Visitor (not verified)if your looking formassageschool you should should look into this school.
Ever since the Spitzer
January 19, 2009 - 21:26 — Matt J (not verified)Ever since the Spitzer scandal, the media has chosen the angle of "men pay these women $5K because it's not about sex, it's about intimacy and the ability to speak 5 languages." BS. It's about confidentiality. If you're a guy on Elliot Spitzer's level, you can't afford to have the hooker turn you into the media, black male you, contact your wife, etc. The result will be a divorce that costs you millions and ruins you. The $5K is an insurance policy against a hooker with a big mouth.
This is a great discussion.
February 2, 2009 - 13:47 — Visitor (not verified)This is a great discussion. A couple thoughts:
I would absolutely pay my wife for sex - the idea is brilliant. The point is that she would provide a wider range of services, with a higher frequency. It would have maximum safety, and in some ways could be more satisfying. The catch is that you have to make more money than her, and have separate finances (I am not sure how common this is, but it is the case for us). But the beautiful part is that since you are a team, you wouldn't even really be losing the money (i.e. you could pay her very well).
And this leads me back to the discussion of price differences. I think everyone posting so far is missing something big. The heart of the matter is that it requires significant monies to get your average suburbanite properly motivated for this.
For example, I have massive sexual appetite, and am not wealthy, but nevertheless, I would not sell my sexual services for $200 an hour. It would not even register my attention. It's just beneath me. Change the amount to $1000 an hour, and now I am properly motivated. And this is precisely the issue. It's not just that these high-class call girls are so skilled, although I am sure that they are. It's that $300 an hour feels to them like an insult to their dignity. 5k for an encounter is only perplexing because we don't put ourselves in their shoes, and the reason we don't put ourselves in their shoes is that we have our heads right up our own asses. Previous posts have pointed this out.
So, for example, suppose a very rich woman offered you money for a night of sex, with the stipulation that you may be required to literally swallow a lot of her pee, or bound and humped hard, anally (with a strap-on), for an indefinite amount of time, or both, or neither. She may want you to have a good time, but on the other hand, she may specifically want you to have a bad time. She may be a sociopath, for all you know. The glaringly obvious truth, I believe, is that anything less that 5000 USD would not compute for most Americans. So we can hardly be surprised that sex sells for this much.
As for the discussion about education making a difference, I am very skeptical. However, intelligence makes a huge difference to certain preferences. Maybe some people prefer low intelligence and some people prefer medium or high intelligence. Whatever the case, it could certainly justify a price to those who seek it. Education is probably used as a (weak) indicator of intelligence.
Horrible.
March 13, 2009 - 08:34 — harimi (not verified)The writer of this article doesn't really even have much of an explanation for the "economics" of high end prostitution. Then she suddenly digresses and writes "...sadly, many women who enter the trade, even at the high end, have at some point in their lives been victims of abuse. Economic reasoning has little sway over how a woman values her body". There is no real data and no apparent knowledge about any academic aspect of prostitution by the writer. Any freshman in highschool taking an intro class in sociology could have written a much more accurate and worldly article than this. I can't believe this is a professional piece of writing. Horrible.
**Applause!!**
March 14, 2009 - 20:09 — Female Escort (not verified)"Being an escort has made me a better person. I have learned to be attracted to people more for what they are like on the inside rather than merely their looks."
This is one of the many things I, too, have gained from the profession.
I wonder how much higher the
March 15, 2009 - 18:12 — JoshT (not verified)I wonder how much higher the rate of abuse is for prostitutes vs other women.
I'm not sure about the
May 5, 2009 - 13:09 — Visitor (not verified)I'm not sure about the difference in rate of violence between women and prostitutes, but here's an interesting debate between whether or not legalizing prostitution would better protect prostitutes from violence: http://prostitution.procon.org/viewanswers.asp?questionID=000120
curious
May 21, 2009 - 23:42 — Visitor (not verified)I am trying to learn more about the profession. I would welcome your advise on how to get into the business on a very small scale. I am needing to make some extra money and have some friends of friends that are interested. I have no idea what to charge and what services I could offer. I need to know basically how to market myself in a very professional, educated way. Also, what other resourses are available online for me.
Thank you, L
Never judge a book by it's
June 23, 2009 - 16:32 — defiant children (not verified)Never judge a book by it's cover. You think you could point out a prostitute from a line up but they blend in with everyday people just like the one that Eliot Spitz was found with. She had a music career going and everything.
Escorts
June 27, 2009 - 17:55 — Montreal escort (not verified)very few women, even high class ones, earn this kind of money. in this economy, the highest paid escorts in the us are struggling now. some even go overseas to work in order to make more money than they are able to in new york now. Personally, I oprefer to stay in Montreal where a scandal such as this one would never happen. It's just not a big deal here. No one would care much.
escort in USA
June 27, 2009 - 17:58 — Montreal escort (not verified)Things are not easy for even high class escorts in USA now in this economy. I prefer to stay in Montreal where such a scandal would not exist. the laws are more lax and frankly, no one would care.
High End..
July 17, 2009 - 00:12 — Visitor (not verified)I am that qualitifed and enjoy. I am good. I want to know more. New to this venue.
The Redondo/Manhattan/Hermosa bust
August 5, 2009 - 02:24 — Visitor (not verified)I was a former companion for this agency that was busted. It was not Soccer moms, but reported as such. We were 24 somethings with a Soccer Mom pimp essentially but not a group of Soccer moms in the slightest.
However you very much can be married and have children and do this job. It is reported that 80-90% of escorts are mothers. It does not fore go marriage at all, in some senses it betters it for the right couple. Not all couples, but the kind that might find escorting ok; might also benefit from this dynamic in a relationship.
I would in fact love to see
August 5, 2009 - 22:18 — Visitor (not verified)I would in fact love to see women so motivated to master a craft that they of their own accord to be reputable in their market have not only gone and aquired higher education but took it a step further and have mastered logistics, common knowledge and broad amounts of specific knowledge. Prostitutes with PhD...
As a businessman (owner not some yuppy running around with a self appointed title) it seems to me that an escort would in fact be the perfect wife. These women would in fact be the smartest, most secure, motivated, superior, attractive women on the planet no? On top of that her earning potential, at least for her peak years, is just as high if not more than mine theoretically.
In addition to the above stated logic, she will continue to be motivated to stay in shape and keep herself healthy and amazingly attractive. Sounds like less than 5% of the female population could compete with these women. I'm not buying it. Put down the Pretty Woman DVD!
The value of any commodity is based in the free market's elasticity. If you can get enough people to buy at a set price enough to sustain your ability to offer the commodity ie, can you get enough people to buy to pay your opportunity/production cost and draw a profit then you have something. The writer talked about opportunity cost with marriage the gay guy talked about production cost with hair and outfits.
In summation, anything is worth only what people will pay for it. You can't turn a hoe into a house wife. One man's trash is another man's treasure. 5,000 to me is like 50.00 to you. And last but not least, most of you can not balance a check book, its funny to see you talk about economics like you have a grasp.
High Priced Prostitutes
August 19, 2009 - 16:32 — Writer (not verified)I came across this Blog in search of information about prostitutes in general. Prostitution unlike the porn trade offers a modicum of anonymity and because of this I believe the number of women who have at some time plied the trade is much greater than generally accepted. Does anyone have information on this?
About the blog regarding high end prostitutes, I found it odd to find this subject when I had just completed writing two stories about high priced prostitutes and started a third--I write erotica and erotic romance--although my girls did not hit the lofty $5500 an hour range. I thought I was being high at a thousand per hour.
Anyway, it's not so surprising really. People with a exorbitant amounts of money, care nothing for what they spend. Money is like gaming chips in the game of life and getting what they are entitled to is all that matters.
To those in the trade. I would be interested in gleaning information for future works from you if you are so inclined. I will check the comments from time to time.
how did she get started i
October 6, 2009 - 16:39 — Visitor (not verified)how did she get started i would be interested to know as i was thinking of embarking on a similar career.
My current girlfriend is a
October 13, 2009 - 02:01 — Visitor (not verified)My current girlfriend is a well-to-do prostitute (which I only found out about recently). I found your comment very interesting.
Becoming a Highend Male Escort
October 15, 2009 - 04:44 — Visitor (not verified)I want to find out how to go about becoming a High End Male Escort. I spent a few years in my early twenties as stripper. I have always had a talent for making women feel very comfortable and safe. I recently watched a special report on this subject. I am educated, handsome and fit. I would love for "My wife and I" to contact me. I have questions for you. Thanks in advance. P
right on.
October 18, 2009 - 19:37 — Visitor (not verified)right on.
I'm thinking about becoming
October 26, 2009 - 09:58 — Visitor (not verified)I'm thinking about becoming a prostitute and you guys really made it easier for me to decide thanxxx
Prostitues/Escort
October 28, 2009 - 02:06 — Mena (not verified)I dont think the price depends on the whatsoeve " Special characteristic" a woman has...
Since this prof. is more of a Pimp-Prostitute connection, It always depends of the Pimp you have and the relation generaly you have with him/her...
I can tell you that I've seen a Gorgeous escorts in London for 110/ meaning that they get 50ph when exclude the agency and those for 350 who appeared to be no more than a middleclass housewives!
I guess the price is put either by the Girl or the Pimp, and if the girl is unexperienced or unwilling much to do that profession she could HARDLY even get some money out of it...
IF she is strickly money oriented, she could get more!
Post new comment