Rich in Love

A friend (who may or may not want to be named) points to this WebMD article summarizing the economic value of sexual activity. It turns out that extra money doesn’t make us that much happier, but sex makes us quite a lot happier, so if we’re putting a money value on units of happiness, sex is worth a lot of money.

After analyzing data on the self-reported levels of sexual activity and happiness of 16,000 people, Dartmouth College economist David Blachflower and Andrew Oswald of the University of Warwick in England report that sex “enters so strongly (and) positively in happiness equations” that they estimate increasing intercourse from once a month to once a week is equivalent to the amount of happiness generated by getting an additional $50,000 in income for the average American.

My first reaction to this is that prostitutes are undercharging. My second reaction is pretty much the same as my correspondent, who writes:

There should be a tax on all that undeclared income! — after all, all those people are getting the benefit of that money, isn’t that the same as actually having the money? How can that $50,000-equivalent benefit be redistributed so that everyone can benefit ‘equally’?

It seems like a good joke, but it really is more than a joke from the perspective of distributive justice. Take a similar case. Those of us who prefer leisure over money, once we’ve passed a fairly low threshold of money, gain all the benefits of society without paying much in through taxes.

Suppose that after $15,000 annual, the marginal value of a dollar for me plummets sharply, while the value of an hour of leisure remains very high. If I could be working 40 hours a week, and making sixty big a year, but I’d rather have the leisure after working only 10 a week, then those extra hours are worth at least forty five grand to me. So I buy a lot of leisure for the price of my opporunity cost. But, unlike the guy who likes owning a Cris Craft and a high-end stereo more than reading library books, taking long walks, and writing poetry, the value of my leisure can’t be taxed. But this seems patently unfair. People who happen to have leisurely preferences just luck out.

How to rectify this? Well, we could just force people who like leisure to work and give the proceeds to the state, but that makes us sort of uncomfortable, as we’re then caused to think a little too hard about what taxes really amount to.

Well, I guess it turns out that getting a weekly rather than a monthly is worth about $50G. And it also turns out that having more money doesn’t get you more laid. So, suppose I like leisure, as above, AND I like sex as much as most people do. (Suppose.) If I manage to fit a weekly into my fairly relaxed schedule, then I’m looking at the equivalent of close to $100G in non-taxable income. This is clearly the way to go! People who work sixty hours a week to make $100G taxable, and as a consequence of all that time working and all that stress, only manage a monthly… well, those people are suckas! They’re paying like 30-ish% of their income, and while I’m not literally rollin’ in the Benjamins, I’m rolling in the endorphins, which is just as good.

This isn’t fair! Maybe I have some control over my preference for leisure. Maybe I cultivated it by reading Marcus Aurelius or something. But my ability to swing a weekly? Well. Suppose (counterfactually, of course) that I’m ruddy and good looking, and the ladies are just irresistably drawn to my animal charisma. Well, I didn’t do anything to deserve my mojo. By babe magneticity turns out simply to be an unredistributable resource. Nice for me! But hardly fair.

Maybe because I won’t be so depressed, which we also find (also, that ladies ought to consider that OrthoTri-cyclen is cheaper than Prozac and condoms), it’ll turn out that I contribute to the surplus of social cooperation by means of my sunny attitude. Everyone likes a guy with a spring in his step. But really, the folks paying for all those public goods, which I happily enjoy, with their labor and their lousy sex lives are certainly getting a raw deal. Notice that if they state provides things like health insurance, and so forth, then I’m really kicking it, and things have gotten even more unfair.

Seriously though, what do egalitarians think about this? Should we legalize prostitution and give people vouchers? Should we have mandatory national sexual service? Or can we just ignore certain deep kinds of inequality if the detection and enforcement costs are too high? That would be interesting.

I’m sure I’ve gotten ahead of myself here, but, you know, good times.

Author: Will Wilkinson

Vice President for Research at the Niskanen Center