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these economies increased or decreased over this five year period, since such conjecture is beyond the
scope of this research project. 36
Existing Approaches to Estimate Illegal, Underground
Economies
Given the lack of knowledge about the prevalence of sex trafficking, we consulted research on other
underground markets to seek techniques that may be adaptable to estimating the size of the illegal
commercial sex economy.
Criminologists, economists, and policymakers have been interested in understanding illegal markets and
have developed a number of techniques in order to estimate the extent of underground economic activity.
Several analyses have improved our understanding of the mechanics of underground markets: Levitt and
Venkatesh’s (1998) thorough economic analysis of revenue, costs, and operations of a Chicago gang shed
light on gang management and violence while Rosen and Venkatesh’s (2007) later study examined the
tension between choice and coercion in Chicago’s sex trade. Similarly, careful examination of government
bribery records in Peru has dramatically increased our understanding of the priorities, operations, and
strategies of corrupt regimes (McMillan and Zoido 2004). Recently, Bahney and others (2013) have
conducted similar analyses using recovered documents from al Qa’ida in Iraq to understand
organizational, managerial, bureaucratic, and financial structures. Unfortunately, these analyses relied on
unique, irreplicable quantitative data. In the absence of these sources, analysts must rely on collecting
new qualitative data to understand the mechanics of underground markets. Furthermore, these studies
did not successfully produce estimates or models of the size of the illegal activity that could be applied to
other cases of illegal markets.
The size of illegal drug markets is more analogous to analysis of the underground commercial sex
economy. However, as a recent extensive review commissioned by the European Union (Reuter and
Trautmann 2009) demonstrates, it is unlikely that methods developed for this purpose would yield
accurate results:
There are a variety of methods for calculating the size of an illicit drug market. The
supply-side approach uses estimates about production and how much is seized or lost on
the way to its final destination … There are at least two different methods on the demand
side. One is based on self-reported information about what individuals spend on illicit
drugs, and the other uses prevalence estimates and combines them with assumptions
about quantity consumed and retail prices to generate expenditure estimates. (Kilmer
and Pacula 2009, 103)
Due to difficulties identifying sex workers and victims of sex trafficking, we do not expect to derive
estimates of the size of the illegal sex economy from relying on the perspectives of these individuals. The
second approach that Kilmer and Pacula note is equally unfeasible. This method relies on extensive selfreporting
estimates of spending, which are not widely available for illegal sexual activity. As mentioned
earlier, commercial sex clients, key actors in the illegal sex economy, are not commonly arrested or
charged. Even for arrested clients, the oft-mentioned problems of under-representing difficult-to-reach
populations (those without stable addresses or those who rarely respond to surveys) would likely be
exacerbated in a study of illegal sexual activity. Second, dishonesty would be a serious concern. For
instance, one study which administered a self-report survey about drug use along with a formal drug test
found that only 20 percent of cocaine users actually reported using cocaine (Harrison et al. 2007). No
analogous test is available to validate responses when investigating participation in illicit sexual activity.
The second demand side approach (applying prices to prevalence estimates) relies on a defensible
prevalence estimate which does not exist for illegal sexual activity.
36 Please see chapter 10 for a brief discussion regarding the need for future research to determine why there are changes in these
underground economies.
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