Production, income, and expenditure in commercial sexual activity as a measure of GDP in the UK national accounts

Brooks-Gordon, Belinda and Mai, N. and Perry, G. and Sanders, T. (2015) Production, income, and expenditure in commercial sexual activity as a measure of GDP in the UK national accounts. Project Report. Office for National Statistics, London, UK.

Abstract

Executive summary: This paper reports the economic activity of sex workers for its inclusion into gross domestic product (GDP) for the UK National Accounts. Markets in consenting but nonetheless illicit activities, including commercial sexual activity and drugs, were incorporated into figures for the UK National Accounts for the first time in 2014. This was to ensure comparability of the Gross National Income (GNI) measurements across EU countries. We evaluate the methods and data used to calculate prostitution in the first ONS (2014) analysis and explore the constraints and limitations in the calculation of prostitution data. We provide an updated figure for the number of sex workers using monitoring data from NHS specialist services and a using a standard methodology that has been employed by HIV prevention organisations across Europe to supply estimates of the number of sex workers in the UK as well as income and expenditure in various sex work markets in which both parties are voluntary participants. The London and regional markets are sectored separately to take account of the denser market in the capital, and to reflect the composition and differential pricing and working practices of sex workers in different sectors based on location and gender. Trying to estimate informal covert markets and activities presents an immense methodological challenge. Not surprisingly there have been few attempts to estimate this hidden part of the UK economy in the peer-reviewed literature or from quality sources. To date only Kinnell (1999), and Cusick, Kinnell, Brooks-Gordon and Campbell (2009) have attempted it in the UK. There remain significant limitations and levels of uncertainty, but we provide a model that is based on primary and secondary data from national and regional governmental and NGO services, to develop a model of the non-observed economy (NOE) which is scalable, simple, and with more explanatory power than previous attempts, to create a framework for the future calculation of this activity in the UK National Accounts.

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