Good point. I feel like it shouldn’t happen much but I agree the simple economic model predicts it should. I could resolve it within the model as some kind of market friction argument (finding someone to sell sex to is not trivial, the landlord makes it easier to go into prostitution by providing himself as a “steady employer”), but I think my real intuition is that this is a place where homo economicus breaks down so I shouldn’t be trying to apply simple economic models.
Also, even if my initial argument does work, this is basically a novel form of rent control, so the standard arguments against rent control should apply (supply isn’t completely inelastic, constraining demand will reduce future supply, which we don’t want).
If the simple economic models break down, it might be worthwhile to think about what other models apply. And also to think about how we know that the simple models break down.
Good point. I feel like it shouldn’t happen much but I agree the simple economic model predicts it should. I could resolve it within the model as some kind of market friction argument (finding someone to sell sex to is not trivial, the landlord makes it easier to go into prostitution by providing himself as a “steady employer”), but I think my real intuition is that this is a place where homo economicus breaks down so I shouldn’t be trying to apply simple economic models.
Also, even if my initial argument does work, this is basically a novel form of rent control, so the standard arguments against rent control should apply (supply isn’t completely inelastic, constraining demand will reduce future supply, which we don’t want).
If the simple economic models break down, it might be worthwhile to think about what other models apply. And also to think about how we know that the simple models break down.