Health-Risking Informal Service: Price, Prevalence and Law Enforcement

Amnon Levy

Economics Working Papers from School of Economics, University of Wollongong, NSW, Australia

Abstract: The health-risking informal service is transacted when the expected extra satisfaction rate exceeds the ratio of the expected extra cost to the formal service price. Its prevalence decreases with the costs of risk bearing for the providers and clients. Law-enforcement effort lowers (raises) the informal service equilibrium price when the ratio of the providers' and the clients' degrees of absolute risk aversion is greater (smaller) than the ratio of the law-enforcement elasticities of their cost bearing. Spending on law enforcement is efficient when the public cost of the expected chain-infection stemming from the informal service exceeds a threshold level.

Keywords: Unsafe sex service; risk bearing; sexually transmitted diseases; public costs; law enforcement (search for similar items in EconPapers)
JEL-codes: I19 K32 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2005
New Economics Papers: this item is included in nep-hea and nep-law
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