Trading Sex

Economics lacks a unified general model capable of explaining sexual exchange from an economic perspective and encompassing theories of marriage and paid sex as special cases. The paper presented in this ZEW Research Seminar proposes a model in which individuals utilize time and relational skills to facilitate sexual exchanges, which can involve both non-monetary and monetary compensations, both within and outside stable relationships. By considering sex as a consumption good produced through time and relational skills, the authors suggest that individual productivity in obtaining sex, the market price for sex, and wages from non-sex-related employment collectively influence how individuals allocate their time between obtaining sex through various means, including spot or repeated relationships (such as marriage), and engaging in the paid sex market. Additionally, these factors also influence the overall volume of sexual exchanges. Gender norms play a role in determining the distribution of individuals across paid and unpaid exchanges by shaping the distribution of human and relational capital, their relative remunerations, gender pay gaps in paid work, and disparities in household labor. Their approach is adaptable, applicable to both legal and non-legal markets for both paid and unpaid sex, and facilitates understanding the effects of regulation, stigmatization, and social norms on sexual exchanges, including existing models of paid sex and marriage as particular instances.