[Paleopsych] NYT Mag: (Freakonomics) The Economy of Desire

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The Economy of Desire
[A good primer.]


    Analyzing a Sex Survey
    What is a price?

    Unless you're an economist, you probably think of a price as
    simply the amount you pay for a given thing - the number of
    dollars you surrender for, let's say, Sunday brunch at your
    favorite neighborhood restaurant. But to an economist, price is
    a much broader concept. The 20 minutes you spend waiting for a
    table is part of the price. So, too, is any nutritional
    downside of the meal itself: a cheeseburger, as the economist
    Kevin Murphy has calculated, costs $2.50 more than a salad in
    long-term health implications. There are moral and social costs
    to tally as well - for instance, the look of scorn delivered by
    your vegan dining partner as you order the burger. While the
    restaurant's menu may list the price of the cheeseburger at
    $7.95, that is clearly just the beginning.

    The most fundamental rule of economics is that a rise in price
    leads to less quantity demanded. This holds true for a
    restaurant meal, a real-estate deal, a college education or
    just about anything else you can think of. When the price of an
    item rises, you buy less of it (which is not to say, of course,
    that you want less of it).

    But what about sex? Sex, that most irrational of human
    pursuits, couldn't possibly respond to rational price theory,
    could it?

    Outside of a few obvious situations, we generally don't think
    about sex in terms of prices. Prostitution is one such
    situation; courtship is another: certain men seem to consider
    an expensive dinner a prudent investment in pursuit of a sexual

    But how might price changes affect sexual behavior? And might
    those changes have something to tell us about the nature of sex

    Here is a stark example: A man who is sent to prison finds that
    the price of sex with a woman has spiked - talk about a supply
    shortage - and he becomes much more likely to start having sex
    with men. The reported prevalence of oral sex among affluent
    American teenagers would also seem to illustrate price theory:
    because of the possibility of disease or pregnancy, intercourse
    is expensive - and it has come to be seen by some teenagers as
    an unwanted and costly pledge of commitment. In this light,
    oral sex may be viewed as a cheaper alternative.

    In recent decades, we have witnessed the most exorbitant new
    price associated with sex: the H.I.V. virus. Because AIDS is
    potentially deadly and because it can be spread relatively
    easily by sex between two men, the onset of AIDS in the early
    1980's caused a significant increase in the price of gay sex.
    Andrew Francis, a graduate student in economics at the
    University of Chicago, has tried to affix a dollar figure to
    this change. Setting the value of an American life at $2
    million, Francis calculated that in terms of AIDS-related
    mortality, it cost $1,923.75 in 1992 (the peak of the AIDS
    crisis) for a man to have unprotected sex once with a random
    gay American man versus less than $1 with a random woman. While
    the use of a condom greatly reduces the risk of contracting
    AIDS, a condom is, of course, yet another cost associated with
    sex. In a study of Mexican prostitution, the Berkeley economist
    Paul Gertler and two co-authors showed that when a client
    requested sex without a condom, a prostitute was typically paid
    a 24 percent premium over her standard fee.

    Francis, in a draft paper titled "The Economics of Sexuality,"
    tries to go well beyond dollar figures. He puts forth an
    empirical argument that may fundamentally challenge how people
    think about sex.

    As with any number of behaviors that social scientists try to
    measure, sex is a tricky subject. But Francis discovered a data
    set that offered some intriguing possibilities. The National
    Health and Social Life Survey, sponsored by the U.S. government
    and a handful of foundations, asked almost 3,500 people a
    rather astonishing variety of questions about sex: the
    different sexual acts received and performed and with whom and
    when; questions about sexual preference and identity; whether
    they knew anyone with AIDS. As with any self-reported data,
    there was the chance that the survey wasn't reliable, but it
    had been designed to ensure anonymity and generate honest

    The survey was conducted in 1992, when the disease was much
    less treatable than it is today. Francis first looked to see if
    there was a positive correlation between having a friend with
    AIDS and expressing a preference for homosexual sex. As he
    expected, there was. "After all, people pick their friends," he
    says, "and homosexuals are more likely to have other
    homosexuals as friends."

    But you don't get to pick your family. So Francis next looked
    for a correlation between having a relative with AIDS and
    expressing a homosexual preference. This time, for men, the
    correlation was negative. This didn't seem to make sense. Many
    scientists believe that a person's sexual orientation is
    determined before birth, a function of genetic fate. If
    anything, people in the same family should be more likely to
    share the same orientation. "Then I realized, Oh, my God, they
    were scared of AIDS," Francis says.

    Francis zeroed in on this subset of about 150 survey
    respondents who had a relative with AIDS. Because the survey
    compiled these respondents' sexual histories as well as their
    current answers about sex, it allowed Francis to measure,
    albeit crudely, how their lives may have changed as a result of
    having seen up close the costly horrors of AIDS.

    Here's what he found: Not a single man in the survey who had a
    relative with AIDS said he had had sex with a man in the
    previous five years; not a single man in that group declared
    himself to be attracted to men or to consider himself
    homosexual. Women in that group also shunned sex with men. For
    them, rates of recent sex with women and of declaring
    homosexual identity and attraction were more than twice as high
    as those who did not have a relative with AIDS.

    Because the sample size was so small - simple chance suggests
    that no more than a handful of men in a group that size would
    be attracted to men - it is hard to reach definitive
    conclusions from the survey data. (Obviously, not every single
    man changes his sexual behavior or identity when a relative
    contracts AIDS.) But taken as a whole, the numbers in Francis's
    study suggest that there may be a causal effect here - that
    having a relative with AIDS may change not just sexual behavior
    but also self-reported identity and desire.

    In other words, sexual preference, while perhaps largely
    predetermined, may also be subject to the forces more typically
    associated with economics than biology. If this turns out to be
    true, it would change the way that everyone - scientists,
    politicians, theologians - thinks about sexuality. But it
    probably won't much change the way economists think. To them,
    it has always been clear: whether we like it or not, everything
    has its price.

    Stephen J. Dubner and Steven D. Levitt are the authors of
    "Freakonomics: A Rogue Economist Explores the Hidden Side of
    Everything." More information on the academic research behind
    this column is at [3]www.freakonomics.com.

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