The Digital Sin City: An Empirical Study of Craigslist's Impact on Prostitution Trends

Online classified ad sites like Craigslist have become a haven for prostitution-related ads. In this paper, we attempt to quantify the economic impact of Craigslist’s entry on prostitution incidence, and identify potential pathways in which the site affects the sex trade. We look for the relationship using a national panel data for 1,763 U.S. counties from 1999 to 2008. Our results suggests that entry of Craigslist is related to 7.1 percent increase in prostitution cases. In addition, the analyses reveals that site entry generates an additional market beyond that operated by the vice industry, and this market is largely made up of sex workers in the 41-50 age group. Further, site entry has a stronger impact in counties with no prior cases of prostitution, and allows for migration in prostitution trends towards neighboring locations with Craigslist. These contributes broadly to the emerging literature that researches the societal challenges associated with online intermediaries and Internet penetration.