Sex Workers and the Cost of Safe Sex: The Compensating Differential for Condom Use in Calcutta

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Sex Workers and the Cost of Safe Sex: The Compensating Differential for Condom

Use in Calcutta

Vijayendra Rao, Indrani Gupta, Lokshin, and Smarajit Jana May 2000

http://econ.worldbank.org/view.php?topic=12 & type=5 & id=1088

The practice of safe sex by commercial sex workers is considered central to

preventing the transmission of AIDS in developing countries. Rao, Gupta, and

Jana estimate the compensating differential for condom use among sex workers in

Calcutta, based on results from a survey conducted in 1993. If, as suggested by

anecdotal evidence, this loss in income is large, it would indicate the

existence of strong disincentives for practicing safe sex. To identify the

relationship between condom use and the average price per sex act, they follow

an instrumental variable approach, exploiting an intervention program focused on

providing information about the AIDS virus and about safe sex practices. The

program, instituted in 1992, was not systematically administered. Using this

method, they found that sex workers who always use condoms face a loss of 79

percent in the average earnings per sex act.