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29 Eur. J.L. & Econ. 1 (2010)

handle is hein.journals/eurjlwec29 and id is 1 raw text is: Eur J Law Econ (2010) 29:1-14 DOI 10.1007/s10657-009-9105-y Simulating the impact of regulation changes on the market for prostitution services Marina Della Giusta Published online: 26 May 2009 © Springer Science+Business Media, LLC 2009 Abstract The paper draws on recent research on the economics of prostitution focussing on the role of stigma in shaping the interaction between demand and supply and the resulting sub-markets in which this activity is typically organised. Here we extend the framework to consider the role of reputation and stigma in determining policy decisions regarding the regulation of prostitution and show how sub-optimal outcomes (from the point of view of the welfare of sex workers) may prevail. Keywords Prostitution Regulation JEL Classification J16 J22 - J23 - J24 This paper introduces an economic approach to studying prostitution, critically assessing the current limitations of economists' contribution to this important policy debate and illustrating the relative merits of economic modelling for policy design. The first part of the paper reviews the principal contribution to prostitution debates that have informed the formulation of the approach adopted here, and indicates how it differs from other social scientific approaches and from existing work addressing these issues in economics. Central to the approach is the recognition of the role of social stigma in determining the configuration of the exchange of paid sex, and the way in which it is in turn understood and affected by policy (for a discussion of the link between stigma and regulation see Sanders 2007). Drawing on an economic model of the market for prostitution services analysing the interaction between demand and supply for paid sex (Della Giusta et al. 2007a), the second part describes ways in which different regulatory regimes are chosen by policy makers. M. Della Giusta (E) University of Reading, Reading, UK e-mail: m.dellagiusta@rdg.ac.uk I Springer

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