Tuesday, January 22, 2008

Celebrating the 4th of July

There weren't lots of surprises in this study of Chicago prostitutes. Just that our nation's Independence Day is a busy one so there are no bargains: "In response to a predictable demand shock associated with the 4th of July holiday, the supply of prostitutes proves to be fairly elastic. Total quantity increases by 60 percent that week...The price increase associated with the 4th of July demand shock is 30%."

But every other day: "There is substantial price variation along observable dimensions of customer characteristics. Black customers pay less on average than whites or Hispanics, all else equal. Repeat clients (especially when they are black) pay less on average than do new customers."

3 comments:

Make the logo bigger said...

What about whites who pre-pay. Any price breaks after, say, 10?

Irene Done said...

I can honestly say I do not know. But I did wonder why those girls don't give out reward cards to their repeat customers. What's the use of a loyalty program if you can't track key transactional data or even effectively measure ROI?

Make the logo bigger said...

I’m thinking maybe even one of those price cards for your keyring?