Sunday, May 24, 2009

Markets in everything

Not one but two instances of young women selling their virginity.

One is a California co-ed, the other a Romanian woman studying in Germany. Putting aside why anyone would want to pay for what I recall as being rather awkward and painful, why are the prices so different? The difference in attractiveness is not large to my eye, and I can imagine, depending on the relative weights assigned to different attributes such as looks and intellect, that one could prefer either one of the two capitalist virgins (or, at this point, former virgins).

The tax rate on earnings from sex work in Germany seems awfully high given that one could make a case for substantial positive externalities from happier, less horny and less stressed men and from a reduced spread of STDs, where the latter would come about if sex workers are more careful about not catching things than are, say, women picked up in bars (and if this is the relevant margin rather than, say, going it alone). Estimating the social optimal tax rate on sex work (under an assumption of legality) would make an interesting exercise for a gradual student.