Effects of Sanctions on Criminalized Prostitution Markets

Yahagi Ken () and Cato Susumu ()
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Yahagi Ken: Faculty of Economics, 13038 Seikei University , 3-3-1 Kichijoji-kitamachi, Musashino-shi, Tokyo 180-8633, Japan
Cato Susumu: Institute of Social Science, University of Tokyo, 7-3-1, Hongo, Bunkyo, Tokyo 113-0033, Japan

Review of Law & Economics, 2025, vol. 21, issue 3, 655-673

Abstract: This study develops a theoretical framework to examine prostitution markets and discusses the appropriate regulation to enhance social welfare and prevent the spread of sexually transmitted infections and sexual abuse. We introduce a high-quality prostitution market with intermediaries (e.g., brothel owners) to provide high-quality services (e.g., formal worksites) and a low-quality prostitution market without intermediaries (e.g., informal worksites). This study demonstrates two key findings regarding regulation. First, strict regulation in high-quality markets can inhibit the beneficial activities of intermediaries, leading to lower social welfare. This suggests that lax regulation may be optimal in high-quality prostitution markets. Second, strict regulation in low-quality markets can have the opposite effect, as it encourages intermediaries’ activities and potentially increases social welfare, supporting the case for stricter regulation in low-quality prostitution markets. This study provides a new perspective on the discussion of appropriate regulations.

Keywords: prostitution; decriminalization; criminalization; sexually transmitted infections (search for similar items in EconPapers)
JEL-codes: K42 L13 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1515/rle-2024-0088

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