ABSTRACT
Subscripts p denote variables related to sex workers. The amount of sex sold reduces both leisure and reputation for sex workers. To make things simple we measure reputation and leisure in the same units as sex sold. Let Hp denote hours available for work in sex market above those worked elsewhere. So if Hp is high, sex workers have few other options than selling sex; if it is low, sex workers have many other options. To capture the labour supply effects without a detailed modelling of labour supply in ordinary jobs we assume that Hp depends on income Ip in ordinary jobs. The higher this income is, the higher is labour supplied in ordinary jobs, and the less attractive it is to work as a sex worker. Leisure, denoted Lp, thus depend on income in ordinary jobs, that is Lp = Hp(Ip) − Sp, where the derivative of Hp is negative. Sex workers derive utility from consumption of goods and services, Cp, which is financed by total income Ip + wSp, where wSp is the income from selling sex. Let Rp denote the reputation capacity of the sex worker. A highRp means that sex workers have little to lose reputation-wise when selling prostitution and a low Rp means the opposite. The actual reputation is denoted rp = Rp − Sp.
