Sexonomics, which applies the economic way of thinking to analyse human sexuality, can be said to have been pioneered by an economist I have mentioned before – the Nobel laureate, Gary Becker. It was Becker’s paper A Theory of Marriage that really got the ball rolling as economists began to look beyond GDP, aggregate demand and market equilibrium. And with the current boom in popular economics books, Steven Levitt, Tim Harford and Dan Ariely have all made their contributions to this burgeoning field.
Before I get into the nitty gritty we need to look at the concept of rational choice in economics. The starting point, the idea that we are rational, doesn’t mean we are rational 100% of the time. However, rational people do tend to respond to incentives – they try to maximize their benefits and minimize their costs. When it becomes more costly to do something, people tend to do less of it. Remember that costly doesn’t just refer to the financial aspect, but to any king of negative effect. On the other hand, when something becomes easier, cheaper or more beneficial, people will do more of it. If petrol becomes more expensive, people will respond in a variety of different ways. Maybe they will do more car pooling. Or they will revert to public transport. If the increase is sustained, they will probably think about getting a more fuel-efficient car in the long run. This simple insight shouldn’t be controversial. But when we apply to other areas beyond the traditional economics purview, we are on more controversial terrain.
We can analyse sex from this rational choice perspective. The costs of engaging in sexual activity have fallen dramatically over the last half century. When I say costs I am referring in particular to the risks of unwanted pregnancies and STDs. The discovery of penicillin as a cheap, reliable and safe cure for syphilis is a clear example of what I mean. Likewise, improvements in contraceptive technology have reduced the risk of getting pregnant. Of course because condoms encourage more people to engage in intercourse more often, this may offset some of these reductions. The major exception to these trends is of course AIDS, which can make sex a deadly game of Russian roulette.
In his 2008 book The Logic of Life Tim Harford, looked at the so-called teenage oral sex epidemic that has had many right-thinking Americans in a panic over the last two decades. Basic economics tells us if the price of risky sex goes up people look for alternatives. On the one hand the percentage of teenage virgins has risen by more than 15 percent over the last two decades. The USA has the Silver Ring Thing, a religiously-inspired sexual abstinence program which encourages teens and young adults to remain celibate until marriage. That is one side of the coin. The other side reflects the American teens who would not be seen dead wearing a silver ring. Since the beginning of the 1990s, the use of the pill is down by almost 20%; while condom use is up by more than 30%. And of course we have boom in oral sex. If oral sex were quoted on the stock market, 1990 would have been a great time to buy. Harford asks all-important question: is there such a thing as a rational blow job? His perspective was that teenagers were in fact responding rationally to the incentives and constraints they faced.
The economist Thomas Stratmann wanted to test the hypothesis of a rational teenage sex drive. He found a real-life experiment in the USA; in some states teenage girls cannot have an abortion without at least one parent being informed. If we believe that people respond rationally to incentives, the logic is that kids will engage in less of the risky activity. And that is exactly what happened. Wherever and whenever abortion-notification laws have been passed, gonorrhoea rates among teenagers have fallen. No such effect is present among adults. The message is clear: when the cost of getting an abortion goes up, teenagers will cut back on unprotected sex.
In his paper The Economics of Sexuality: The Effect Of HIV/AIDS on Sexual Behaviour, Desire, and Identity In the United States, the 33-year-old Emory University economist ,Andrew Francis uses a simple microeconomic theory of sexuality to make predictions about the effect of AIDS on sexuality. Francis discovered that both men and women who knew a relative who had AIDS were less likely to sleep with men. Here are the key parts of his report:
Since men are more likely to have AIDS than women, and anal receptive sex is riskier than vaginal insertive sex, men shift from homosexuality to heterosexuality. Since women are less likely to have AIDS than men, and oral sex is safer than vaginal receptive sex, women shift from heterosexuality to homosexuality.
… I present evidence that changes in the cost of sexual activities due to the AIDS epidemic have caused people in the middle of the sexual continuum to shift from male to female sexual partners. That is, some men move toward heterosexual behaviour, while some women move toward homosexual behaviour.
In a previous post about the dismal science I mentioned the economist Steven Landsburg and his book More Sex Is Safer Sex. Here I want to look at his argument in more detail. When the AIDS epidemic began, it was the time for moral outrage; AIDS was a punishment for our extreme permissiveness and socially irresponsible sexual behaviour. It was said to divine retribution against gays, an argument that was made to look ridiculous when millions of heterosexual Africans died. Economist Steve Landsburg has a rather different take; he makes the economic case for promiscuity. For him the real problem is self-restraint. He sets up the following hypothesis:
Suppose you walk into a bar and find four potential sex partners. Two are highly promiscuous; the others venture out only once a year. The promiscuous ones are, of course, more likely to be HIV-positive. That gives you a 50-50 chance of finding a relatively safe match. But suppose all once-a-year revelers could be transformed into twice-a-year revelers. Then, on any given night, you’d run into twice as many of them. Those two promiscuous bar patrons would be outnumbered by four of their more cautious rivals. Your odds of a relatively safe match just went up from 50-50 to four out of six.
So, increased activity by sexual conservatives can help to reduce the incidence of AIDS. By increasing their productivity, they can increase the pool of safe potential partners for everybody else. Professor Michael Kremer of MIT’s economics department argued that the AIDS could be significantly reduced if everyone with fewer than about 2.25 partners per year were to take additional partners more frequently. Monogamy, on the other hand is deadly. Landsburg does a thought experiment:
Imagine a country where almost all women are monogamous, while all men demand two female partners per year. Under those conditions, a few prostitutes end up servicing all the men. Before long, the prostitutes are infected; they pass the disease to the men; and the men bring it home to their monogamous wives. But if each of those monogamous wives was willing to take on one extramarital partner, the market for prostitution would die out, and the virus, unable to spread fast enough to maintain itself, might die out along with it.
Landsburg argues that people who are less sexually active currently supply too little sex because their services are underpriced. We have a problem of asymmetric information. If these conservatives could effectively demonstrate their clean sexual histories, they would become a valuable commodity on the market. They would have suitors fighting over them. But it’s very difficult to demonstrate this knowledge.
Sometimes you can falsify this information I am thinking of the expanding market for fake hymens in the Middle East. For a mere $30 a woman can get her first night back., The “hymen”, which is made by Giglio, a Chinese company, is a 5 X 7cm folded piece of albumen covered on one side by dark red ink. It is placed in the vagina twenty minutes before sexual congress. The plastic hardens slightly and rips upon intercourse. There is blood on the sheets and everyone is happy. Isn’t globalisation a wonderful thing?
The economist Landsburg has a solution to the asymmetric information problem: it could be solved if our sexual pasts could be made more transparent. Imagine as you were slowly undressing your conquest, you were to gaze lovingly at her thigh. There you find an embedded monitor:’ this site has been accessed 314 times.’
So there you are. Next week in the the thrilling second installment, I will be looking at the economics of dating