The New York Times

December 11, 2005
Freakonomics

The Economy of Desire

By STEPHEN J. DUBNER and STEVEN D. LEVITT

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 dividend.

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

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 replies.

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 www.freakonomics.com.