Is Gender Equality Disrupting Sexual Supply and Demand?

Over the past couple of weeks practically every media site has run a piece on a new “economic theory” that argues that gender equality is driving down the price of sex. Valid critiques have been made but analysts are missing one very important point: This is not an economic model and if it was it wouldn’t be a very good one.*

Here is the basic argument by social psychologist Roy Baumeister. Men like sex more than women and so in the market for sex they represent the “demand.” Women like sex less than men, so in the market for sex they are the “supply.” In short, men have to compensate women in order to entice them into having sex. In a simple supply & demand model then, the price of sex is the point at which supply equals demand.

Now, to complicate matters, this is not a perfectly competitive market. In this market the women collude with each other by agreeing to reduce the supply of sex which has the effect of driving up the price. So, this is very much like the OPEC oil crisis in the 1970’s when oil producers created massive inflation by reducing the supply of oil on the world market, except sex inflation is happening a much larger scale since it involves all the women in the world.

Now the OPEC cartel’s strategy to raise world prices didn’t last very long and that is because oligopolies tend to break down fairly quickly. On a market for sex where women are colluding to keep prices high there is always an incentive for one woman to deviate; she can always offer sex at a lower price and capture a large share of the market. Okay, so all the other women call her a slut, but she is getting more resources and more sex so who could blame her?

Economic theory predicts that with a large number of suppliers on the market there is no hope for an oligopoly and that market price is set at the perfectly competitive level. Apparently though, according to the authors of this study, the extent of human history has been an insufficient amount of time to reach this market equilibrium. Instead this cartel among women did not break down until women began to gain financial independence from men. Only then, when women no longer needed men’s resources, did women begin to increase their supply of sex on the market.

So to recap, women with little or no power used sex to extract resources from men by withholding sex, and now women who have more power no longer use sex to extract resources from men because…maybe they no longer want men’s resources? I don’t have the answer for that since it isn’t discussed in the paper and I myself can think of no reason why it would be true.

The authors prove this point by using data on sexual behavior in 37 different countries collected by Durex’s website (yes, the condom producer) combined with gender gap data from the Global Gender Gap Report 2006. They find that countries with greater gender equality are also those with more promiscuity measured in terms of: greater number of sexual partners, more one-night stands, lower age at first sex and a more liberal attitude toward sex before marriage.

Some excellent points have already been made in the argument that this relationship between promiscuity and gender equality is probably attributable to factors other than a breakdown of the female sex cartel (see for example, Amanda Marcotte’s piece on Slate) but I have a purely economic theory – one, in fact, that we have discussed before here on Dollars and Sex.

There is a strong correlation between gender equality and national income; it is the wealthiest nations in the world that allow women the greatest independence. You could argue that sex is a luxury good (one that you consume more of as your income increases) and that would give you the simple statistical relationship between more sex and greater gender inequality. But, I suspect that the relationship is more complicated and comes down to what makes nations wealthy in the first place; laws and social norms that place limited controls on individual behavior.

To quote my previous post:

…cultural traits that encourage [economic] growth are openness to new ideas, trust, and a willingness to accept risk. It is possible that these same characteristics are ones that encourage promiscuity. After all, what can be more trusting, and more risky, than sex with a stranger? If I am correct, it is not income that leads to promiscuity, but rather other characteristics of a free society that lead to both high income and high promiscuity.

You won’t be surprised to learn that I do think economics can tell a story about human sexual and mating behavior. But economic theories are complex, just like human sexuality, and go far beyond a primitive understanding of supply and demand. Much of the criticism of this paper, focusing on whether or not men are buyers and woman are sellers of sex, somewhat misses the point; that even you accept that premise the theory is seriously flawed because it ignores basic economic principles on the way that markets operate.

* Commentators seem to have had a difficult time locating the paper that all this debate has spawned and, in fact, I contacted the author who wrote me back to say there was in fact no study with the title “Sexual Economics: A Research-Based Theory of Sexual Interactions, or Why the Man Buys Dinner” which has now been widely cited. The actual paper is the more blandly titled “Cultural Variations in the Sexual Marketplace: Gender Equality Correlates with More Sexual Activity” published in the Journal of Social Psychology in April.