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A benefit-cost framework for early intervention to prevent sex trading

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  • Martin Lauren

    (Urban Research and Outreach-Engagement Center (UROC), University of Minnesota, 2001 Plymouth Avenue North, Minneapolis, MN 55411, USA)

  • Lotspeich Richard

    (Department of Economics, Indiana State University, Terre Haute, IN 47809, USA)

Abstract

Prevention of juvenile sex trading in the US has risen to prominence in public policy discourse. We develop a generalized benefit-cost model to shed light on this policy issue and illustrate the framework with a case study from Minnesota. The model treats government-funded intervention as an investment project and calculates its net present value. Benefits are derived from harms avoided by reducing the extent of sex trading. The impacts of youth involvement in the market for sexual services are highly complex, and clear data on them are lacking. To account for empirical ambiguity we develop the model around a representative individual, approximate the effect of intervention on the sex market, and conduct sensitivity analysis with key model parameters. The case study evaluates seventeen distinct harms caused by sex trading based on conservative best estimates from scholarly literature. We find a large positive Net Present Value, suggesting it is in the best interest of Minnesota taxpayers to support intervention.

Suggested Citation

  • Martin Lauren & Lotspeich Richard, 2014. "A benefit-cost framework for early intervention to prevent sex trading," Journal of Benefit-Cost Analysis, De Gruyter, vol. 5(1), pages 1-45, January.
    • Handle: RePEc:bpj:jbcacn:v:5:y:2014:i:1:p:45:n:3
    DOI: 10.1515/jbca-2013-0021
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    References listed on IDEAS

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    1. Joseph E. Aldy & W. Kip Viscusi, 2008. "Adjusting the Value of a Statistical Life for Age and Cohort Effects," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 573-581, August.
    2. Greene, J.M. & Ennett, S.T. & Ringwalt, C.L., 1999. "Prevalence and correlates of survival sex among runaway and homeless youth," American Journal of Public Health, American Public Health Association, vol. 89(9), pages 1406-1409.
    3. Amy Farmer & Andrew W. Horowitz, 2013. "Prostitutes, Pimps, and Brothels: Intermediaries, Information, and Market Structure in Prostitution Markets," Southern Economic Journal, John Wiley & Sons, vol. 79(3), pages 513-528, January.
    4. Linda DeRiviere, 2006. "A Human Capital Methodology For Estimating The Lifelong Personal Costs Of Young Women Leaving The Sex Trade," Feminist Economics, Taylor & Francis Journals, vol. 12(3), pages 367-402.
    5. Sugden, Robert & Williams, Alan, 1978. "The Principles of Practical Cost-Benefit Analysis," OUP Catalogue, Oxford University Press, number 9780198770411.
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