BELGIUM: Prostitution Services in the Balance of Payments
Introduction
Prostitution services are parts of the BOP services account. To adhere to the principle of moving producer/moving consumer, imports are regarded as personal, cultural and recreational services and exports are part of travel services. Prostitution accounts for 0,06% of total services imports and 0,04% of total services exports.
Scope, Methodology, Compilation Practices, and Data Sources
Estimates for prostitution services are constructed based on the reference year 2015, for which a detailed supply-based study was conducted208 by the University of Leuven in collaboration with the National Bank of Belgium. Services are divided in different market segments, namely window prostitution, street prostitution, services in clubs and brothels, services in massage parlor and sauna establishments, escort and private services, and services provided by male sex workers. For each segment, production in the reference year is estimated by multiplying the segment specific price by its corresponding specific volume.
Transactions for window prostitution are estimated for the reference year based on direct window counts of known prostitution areas in Belgium (Ghent, Liège, Ostend, Seraing, Antwerp and Brussels). More detailed counts of hours worked per window and duration of transactions were conducted in Antwerp and Brussels. The combination of these data allows making an estimate of the number of transactions for the year 2015.
For all other segments, market shares for the reference year are estimated based on Internet advertisement. These market shares are subsequently combined with the number of transactions estimated for the segment of window prostitution to obtain a number of transactions per segment. The total number of transactions is back casted using the evolution of the male population between 18 and 64 years old. Moreover, the difference in the distribution of market shares between 2000 (estimate based on data from organizations helping prostitutes) and 2015 (study University of Leuven) is used as well, so that the evolution of the market share across different segments could be captured in the estimation.
Average prices per segment in the reference year are also estimated on the basis of data from specialized websites and are back casted using the general index for conventional wages, which will also be used for extrapolation of future years.
An exception is the male sex workers segment, where Internet advertisement was not deemed reliable. A general, conservative, estimate is made, by uplifting female prostitution services with 5 %. Intermediate consumption is estimated by adopting the hypothesis that the intermediate consumption amounts to 20 % of the production generated by sex workers. To avoid double counting, it is assumed that this expenditure was already included in final consumption expenditure estimates for housing services (COICOP 04) and needs to be deducted from this expenditure group.
The hypothesis is made that 5 % of all clients are non-residents. The percentage of non-resident sex workers was estimated per segment in the study and held constant for the period 1995 - 2015. On average, 8.9 % of all sex workers are deemed non-resident. This estimate allows discriminating between domestic production, importations and exportations.
All consumption of prostitution services is considered to be final consumption expenditure of households. Services consumed by non-residents, and produced by residents, are considered to be exportations and consumption of non-residents on domestic territory. Services consumed by residents, and produced by non-residents, are considered to be importations and domestic consumption. Services consumed by residents abroad are considered to be already included in the estimates of the tourist balance (BOP), as the basis of this estimate is expenditure made with credit cards and cash estimates. They are therefore not added separately.
Linkages Across Statistical Domains
Estimates are introduced in a harmonized way in both balance of payment and national accounts.
Current Challenges and Conclusions
Challenges in estimating the illegal economy are mostly due to the lack of source data and the need to set hypotheses.
Annexes
A detailed description of the methodology used can be found here.
A detailed description of the study conducted by the KULeuven for prostitution can be found here: Adriaenssens, S., Hendrickx, J., Heylen, W. & Machiels, T. (2015)., “A direct measure of output in prostitution in Belgium”, Research paper KULeuven,