The Economics Of Sex?

By Graham Peterson

The Austin Institute has published a very compelling Youtube video purporting to explain recent demographic changes in the dating and marriage market.

The story begins that men and women have extremely different preferences for sex and emotional attachment.  Reasons include: data showing that men initiate sex more often, a study that the authors think shows men are more sexually permissive, and dating websites show that men are more likely to say things like, “looking for fun.”

The problem is that none of these are actual derivations of the underlying preferences of men.  They are all what we call “stated preference” derivations of preferences.  Gender scholars will know them better as gender performances.  Either way, it is not economics.

The most commonly cited evidence that men like sex a bunch more than women is a paper from the late eighties.  When men walked around a college campus asking women abruptly to go home with them, vanishingly few women accepted.  But when women asked the reverse, a majority of men accepted the offer.  Shocking.

The other 95% of this paper never gets mentioned.  Again, shocking.  The authors of the paper admit that this is not evidence at all of men’s preferences for sex – it could just be that women are more afraid of being raped.  Or it could be that gender roles proscribe women from accepting such offers.

Moreover, earlier sexual arousal experiments in the late 70s had established that both men and women were equally biologically aroused by erotica (as measured by instruments), and women actually reported when asked that they were more aroused, than the men reported the men were.*

This lineage of research began with mid and late 20th century sociobiology, that unselfconsciously took for granted the naturalness of 20th century hominid mating rituals in the developed world and anthropomorphized and projected them on to other species.  In this view, men are aggressive because sperm are cheap, and men will run around raping their way to genetic proliferation, and women are coy because eggs are expensive.  Huzzah.

This theory of sexual selection has been smashed to bits since, but we love an econo-biological myth to reinforce our secular civil-religious beliefs about our industrial age mating rituals, so we seem to be stuck with this ridiculous idea.

Not only are these assumptions about the difference between men’s and women’s preferences probably (badly) wrong, they don’t lead to the conclusions the video derives even if we take them for granted.  Let’s go to the economic theory.

In this model, men and women both trade off sex for marriage or romance, on an indifference map.  Men’s indifference curves are shaped such that they would give up a lot of romance for a little sex (because they like sex a lot compared to romance), and women’s are the opposite.

If women prefer romance so much, then the introduction of the pill (which lowers the cost of sex) could not have made women trade off a lot of what they really like, for a lot more of something they don’t like as much.  Women in the last 30 years, in this view, have traded off about a decade of their preferred “good,” marriage in their late teens and early twenties, for an explosion in the number of premarital partners, their less preferred “good.”  Even very large movements of their budget constraint via the plummeting cost of sex wouldn’t have moved their optimum consumption bundle much, given their strong preferences for marriage in lieu of sex.

In short – if you like something (sex) but like something else a way ton lot more (romance), and the first thing gets cheaper, even by a lot, you’re not going to start trading of your favoritest thing in the world for the thing that’s now marginally cheaper.  I don’t move out of my apartment and on to the street in 16 degree weather when the price of shoelaces goes down.

The problem with the market where people arbitrage sex and romance back and forth, is that sex and romance are actually highly complimentary goods — they go together — and that’s true for both sexes.  Sex makes romance more enjoyable and vice verse.  And so they’re often consumed together — like coffee and cream.  Complementarity of sex and romance implies that neither men nor women will trade off enormous amounts of one for the other — they’re no good without one another (casual hookups are no good without some flirting and jokes and attention – love making is no good without strong-felt commitments).

Finally, the analysis in the video, where there is a bifurcated market for sex and another for romance (in which women hold the cards in the market for sex, because they don’t like sex, and men hold the cards in the market for romance, because they don’t like romance), doesn’t work because agents are arbitraging the same goods for one another in both markets — meaning they’re the same market.  And in that single market, agents consume particular bundles of combinations of sex and romance together, just like coffee and cream.  People will give up a little bit of coffee for more cream, and vice verse, but not at the incredible magnitudes the video alleges.

If women really like marriage that much more than sex, there is just no way they would have given up so much marriage for a bunch of sex when the cost of sex went down.  The empirical study the video references shows that women gave up marginal marriages, that is, shotgun marriages they didn’t like that much, when sex got cheaper.  These marriages exist on precisely the opposite end of the spectrum from close-to-heart romantic marriages women (and men!) prefer over casual sex.

Moreover, women who really loved all those marriages could have just stayed married, and had more sex within their marriages without risking pregnancy once the pill was introduced.

The video concludes that women should collude with one another to raise the price of sex.  But here again the economics escapes the authors.  Given the story the authors have alleged, women would be best off to just stop taking the pill.  The option is much, much cheaper than collusion, which is extremely expensive to enforce.  So why don’t these economically rational women in the video take the cheapest route to getting what they allegedly really want?

Because they actually want low commitment sex and longer trial periods to enhance the long run stability of lifetime commitments – a positive empirical development about marriage the authors strangely leave out.  The age of first marriage is getting older, but the older you are at first marriage, the more stable your marriage will be on average.

*Actually the most striking result in the paper is that when the question was whether the person would go on a date – both 50% of men and women accepted the offer.  Apparently when you’re measuring men’s and women’s interest in one another, within acceptable social boundaries, rather than measuring men’s and women’s willingness to violate social codes for sex, it looks like men and women like each other about the same.


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