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Risky Business: The Market for Unprotected Commercial Sex

University of California, Berkeley and National Bureau of Economic ResearchUniversity of California, BerkeleyInstituto Nacional de Salud Publica

While condoms are an effective defense against the transmission of HIV, large numbers of sex workers are not using them. We argue that some sex workers are willing to take the risk because clients are willing to pay more to avoid using condoms. Using data from Mexico, we estimate that sex workers received a 23 percent premium for unprotected sex. The premium represents a value of one life year of between $14,760 and $51,832 or one to five times annual earnings. The premium jumped to 46 percent if the sex worker was considered very attractive, a measure of bargaining power.