Prostitution, GDP, and £1.7 billion due

Oct 31, 2014

David Spiegelhalter, professor of public understanding of risk, does some back-of-the-napkin math to describe why recent prostitution estimates for the UK are problematic.

As always, it’s best to do a simple reality check. The ONS assumptions come to around 61,000,000 visits a year. Let’s say 50,000,000 are from locals rather than foreign visitors. There are around 27,000,000 men between 18 and 50 in the UK (taking an arbitrary upper limit), so this would mean that on average each of them buys sex twice a year. In fact the latest Natsal survey found that 3.6% of men reported paying for sex in the last 5 years – let’s say that means that considerably less than 1,000,000 men a year pay for sex, maybe 500,000. So the ONS assumptions mean that men who pay for sex do so on average twice a week. This seems high.

The assumptions also mean that the average person working in prostitution is turning over nearly £100,000 a year, which Jolyon from Tax Relief 4 Escorts says is completely implausible, and he should know.

Spiegelhalter makes a few of his own assumptions in there, but you can see why estimating illegal activity and then using those numbers to calculate gross domestic product can be a challenge.

If you recall, the gross domestic product for the United Kingdom rose by 5 percent, largely in part due to estimates trying to account for drug sales and prostitution. Given that illegal activity and careful, public record-keeping typically don’t go together, the new numbers were rough at best. For prostitution in particular, the numbers from the Office of National Statistics estimated an extra £5.7 billion added to the GDP.

The problem now is that the United Kingdom, as a member of the European Union, apparently owes £1.7 billion. This is based on gross national income which uses gross domestic product in its equation. Ouch. Consequences.

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