Risk attitude, risky behaviour and price determination in the sex market: A case study of Yangon, Myanmar

• Published date: 01 December 2023
• Author: Hiroyuki Yamada,Yuki Kanayama,Kanako Yoshikawa,Kyaw Wai Aung
• Date: 01 December 2023
• DOI: http://doi.org/10.1111/1468-0106.12434

ORIGINAL ARTICLE

Risk attitude, risky behaviour and price

determination in the sex market: A case study

of Yangon, Myanmar

Hiroyuki Yamada

1

| Yuki Kanayama

2

|

Kanako Yoshikawa

3

| Kyaw Wai Aung

4

1

Faculty of Economics, Graduate School

of Economics, Keio University,

Tokyo, Japan

2

Stockholm School of Economics,

Stockholm, Sweden

3

Osaka School of International Public

Policy, Osaka University, Osaka, Japan

4

STI Myanmar University, Yangon,

Myanmar

Correspondence

Hiroyuki Yamada, Faculty of Economics,

Graduate School of Economics, Keio

University, Tokyo 108-8345, Japan.

Email: hyamada@econ.keio.ac.jp

Funding information

Japan Society for the Promotion of

Science, Grant/Award Number:

22K18534; Keio Gijuku Academic

Development Funds

Abstract

Commercial sex is a prevalent but risky profession in

many countries, including Myanmar. Although risk

attitude is a potentially important factor in determining

risky behaviour of female sex workers (FSWs), few

studies have explicitly investigated the issue. This is

one of the first studies to elicit the risk attitude of FSWs

using a simple risk game. We conducted the risk game

with FSWs in Yangon, Myanmar, where the average

GDP per capita is very low, to study how risk attitude

is related with observable characteristics and with risky

behaviour related to the use of condoms in the com-

mercial sex market. We found that risk attitude is rela-

tively independent of observable characteristics and the

decision to use a condom. However, transaction prices

were directly associated with risk attitude.

1|INTRODUCTION

The commercial sex business is a worldwide phenomenon and is considered one of the oldest

professions (Wilson, 2019). Needless to say, commercial sex work is a risky business, especially

due to the risk of sexually transmitted diseases (STDs). The same is true in Myanmar's largest

city, Yangon. According to the Joint United Nations Programme on HIV/AIDS (UNAIDS), the

Received: 18 January 2022 Revised: 6 February 2023 Accepted: 17 July 2023

DOI: 10.1111/1468-0106.12434

This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distrib ution and

reproduction in any medium, provided the original work is properly cited.

© 2023 The Authors. Pacific Economic Review published by Hong Kong Economic Association and John Wiley & Sons Australia, Ltd.

Pac Econ Rev. 2023;28:665–691. wileyonlinelibrary.com/journal/paer 665

HIV prevalence among the population aged 15–49 years in Myanmar in 2018 was 0.8%, whereas

the rate among sex workers was 5.6%.

1

Thus, working under conditions with high risk of con-

tracting STDs can be quite stressful for female sex workers (FSWs). Commercial sex work is also

risky in another sense: it is illegal in Myanmar. FSWs are subject to arrest and other penalties if

apprehended by the police. Furthermore, they face a high level of stigma and discrimination

due to deeply rooted cultural norms (Aung, 2019).

Some literature on prostitution has focused on risky sexual behaviour in FSWs in terms of

price differentials between safe and unsafe commercial sex. Rao et al. (2003) found that FSWs

in India who always use condoms face losses of between 66% and 79% compared with those

who never use condoms. Gertler et al. (2005) found that Mexican FSWs draw a risk premium of

approximately 15% per transaction to engage in sex without a condom. Arunachalam and Shah

(2013) reported that the premium for unprotected sex increases with the local prevalence of

STDs in Ecuador.

2

Jakubowski et al. (2016) reported a 136% price premium for unprotected sex

in Kenya.

However, an important aspect is missing from the literature; that is, risky behaviours in

FSWs may depend on risk attitude, which is a crucial preference parameter related to their util-

ity function. In recent years, the economic literature has invoked risk attitude to explain the

economic behaviours of individuals in the real world. For instance, Assandri et al. (2018) stud-

ied the relationship between risk attitude and redistribution preferences. Andreoni et al. (2019)

simultaneously explored the risk preferences of children and adolescents. Gürdal et al. (2017)

demonstrated the relation between risk attitudes and portfolio choice in the context of pensions

(2017). However, to our knowledge, few empirical studies on commercial sex markets have con-

sidered the risk attitude parameters of FSWs, despite their potentially great importance. The

lone exception is Lépine and Treibich (2020), who used an incentivized Gneezy and Potters task

and specific risk-taking scales in four domains (in general, finance, health, and sex) to measure

risk aversion in sex workers in Senegal in 2017. They found that risk aversion is an important

predictor of sex workers' sexual behaviours. They revealed that sex workers with a higher risk

aversion engage in fewer sex acts with clients, have fewer clients at risk of HIV, are more likely

to engage in protected sex acts, and as a result, earn less money per sex act. However, Senegal is

the only African country (and perhaps one of only a few countries in the world) where sex work

is legal and regulated as a public health intervention.

3

Hence, the findings obtained in their

paper may not be generalizable to other countries.

To fill this gap in the literature and provide evidence in a different country setting, we con-

ducted an exercise involving a very simple risk game developed by Crosetto and Filippin (2013),

with about 400 FSWs in Yangon, Myanmar to elicit risk attitude parameters and connect them

with observable characteristics, decisions about risky behaviour, and price determination in the

commercial sex market. As an indicator of risky/safe sexual behaviour, we investigated whether

or not FSWs used condoms in each of their four most recent transactions, for consistency with

the literature.

A typical concern may arise when researchers estimate the hedonic regression of transaction

prices in the commercial sex market. A potential and crucial concern is omitted variable bias

induced by not including a risk attitude variable in the specification. Consider a situation in

which an FSW faces a trade-off between engaging in risky sex (e.g., sex without condom) and

the price for engaging in risky sex. In other words, consider a situation in which an FSW can

earn more money for a riskier sexual transaction. A more risk-tolerant FSW may be more will-

ing to engage in risky sex at a relatively lower price, resulting in an underestimation of the pre-

mium of risky sexual services. In another extreme case, an FSW's decision may be completely

666 YAMADA ET AL.