Economics of prostitution: $27-an-hour average, ‘freebies’ to cops

? A two-year study of the economics of prostitution in Chicago found the women were forced to service police officers, worked more during holidays like July 4th and varied pricing based on their customer’s race, according to a preliminary paper presented by the researchers.

University of Chicago professor and “Freakonomics” author Steven D. Levitt and sociology professor Sudhir Venkatesh of Columbia University organized a two-year study of street-level prostitution in Roseland and Pullman, Ill. The study, which ended last May, also included Washington Park for about eight months after police began a crackdown and the regular prostitutes moved their activity six miles north.

Although it has yet to be formally published, the study has been read by Chicago aid workers, some of whom dispute its findings on the sex trade in the city.

The researchers hired trackers, typically former prostitutes themselves, to follow a sample of about 160 female sex workers and record details of each trick they turned. Working prostitutes were paid $150 a week to participate in the two-year study.

Street prostitutes reported that about 3 percent of the tricks they turned were “freebies” given to Chicago police officers to avoid arrest, according to a draft report of the study, which was presented to a packed session last weekend at an annual national economics conference in New Orleans.

The paper said that full-time prostitutes made on average about $27 an hour, which amounted to less than $20,000 a year. If they had a pimp, the women made a little more, even after he took a 25 percent cut of their earnings. The women reported being beaten about once a month on average.

Fridays were the sex trade’s busiest days; Mondays the slowest.

White and Hispanic men were charged more, the study found, while blacks and repeat customers paid less. Seasonal spikes in demand drove up prices – the study found prices increased 30 percent in Washington Park over the July 4 week – and brought more women into the market.

Markets in Roseland and Pullman operated differently, the study found. In Pullman, prostitutes worked with one of four pimps while in Roseland prostitutes worked the streets on their own, according to the study.

Levitt, whose best-selling book “Freakonomics” made him a nationally known economist, declined through a university spokesman to comment and did not want the results published because the paper was still preliminary and incomplete. Venkatesh replied to a Chicago Tribune e-mail and also asked that the results not be published.

However, details of the research and the preliminary findings have been circulated to aid groups in the city and presented elsewhere, and mentioned on Levitt’s Freakonomics blog. The full draft of the paper is on the university’s Web site, marked “extremely preliminary and incomplete.”

Chicago groups working to help women escape the sex trade said they felt the draft paper overall failed to adequately address prostitutes’ suffering, seemed inaccurate in spots and could be misread.

Samir Goswami, associate director of policy at the Chicago Homeless Coalition, said that while the data collected by the researchers was impressive, the study seemed to hold little potential in addressing the problem. He noted that street prostitution is a small fraction of the sex trade.

“It’s as a classic example of an economist trying to tackle a very complicated problem just by looking at numbers,” said Goswami, who said he read the paper about five weeks ago. “It’s flawed because the numbers do not explain the social situation these women are in. It’s not just a business transaction.”

Advocates also said prostitutes are beaten more frequently than reported in the study, and some questioned the findings on pimps, maintaining that the men take a larger cut than 25 percent and there are in fact pimps in Roseland.