HUNGARY: Estimation of Prostitution Activity in the Hungarian National Accounts
Introduction
In Hungary the figures of illegal activities are calculated in the framework of National Accounts for the following three types of activities:
- drugs
- prostitution
- smuggling of tobacco
Including these transactions in the National Accounts have impact on the output, intermediate consumption, gross value added, final consumption and export and import figures.
The results of the calculations for exports and imports are transmitted to the external trade statistics and balance of payments statistics.
The following summary of the methodology of the estimation of prostitution activity is based on the ESA 2010 GNI Inventory of Hungary (2015) the reference year of the calculation is 2011 as reported in the GNI Questionnaire 2015.
Prostitution Services
According to the Hungarian legislations, the prostitution itself is not indictable offense (in case of following certain rules) but other activities connected to it (for example, procuring prostitutes and clients, managing girls, collecting defensive money) are considered illegal. The incomes deriving from these activities are not declared and taxes are not paid after them, even if they happen to be legal, so they are a part of the hidden economy.
For the calculation of production, income and consumption deriving from prostitution, there are estimated annually:
- the number and composition of resident or non-resident persons purchasing sexual services by type of services,
- the number and average prices by type of services,
- the value of domestic production and consumption,
- the income derived from prostitution.
Civil organizations representing the interests of prostitutes and sociology reports announce information about sexual services. These reports indicate that one-fourth of sexual service consumers are foreigners. Since Hungary is a transit area for the traffic of lorries/trucks and guests in hotels are mostly foreigners, the presence of foreign purchasers is significant in most fields of prostitution. The sexual services at restaurants and at hotels are consumed mostly by foreigners. The Hungarian consumers are in majority among the purchasers of peep-shows, sex-telephones or pornographic films through internet.
The annual number of purchased occasions concerning sexual services is defined by the purchasing frequency of consumers. The frequency can be determined by the help of documents on behaviour- and sociology-studies. The number and composition of prostitutes can be estimated by the help of women organizations and trade unions. Now, the number of prostitutes announced by civil organizations is much higher than one should expect on the bases of estimation on the “service”-numbers. According to sociological surveys, the ratio of “occasional” prostitutes is significant. Although, they are considered as prostitutes, they give services rarely, mostly during a period of time when they or their family are in a difficult situation. That is why have to be cautious to estimate the real quantity and value of sexual services based on the number of prostitutes only.
The average price of these occasions is very different, depending on the type of services. The cheapest one is the service on main roads, occasions in hotels are triple. The “escort” girls serving at home ceremonial events, the call-girls and the boys giving homosexual services have the highest average price per a consumed occasion. Information on prices is generally published in the reports of police and the interviews of prostitutes, as well.
The incomes deriving from prostitution are not equal to the revenues gaining from this activity. About a third of the revenues deriving from sexual services cover the cost connected to the service (intermediate consumption and imports), for example hair dressers, cosmetics, taxis, clothing etc. We do not take as intermediate consumption like the money paid by the prostitutes to the procurers, to the mediators, to the drivers or to the owners of rented rooms. They are treated as income redistribution among households, so they are not appearing in the accounts. In the connected sociological studies, the volume of the income-portion given to the procurers is a constant subject of debate. In most of the studies, the estimated shares of income given to the procurers are about a third or half of the whole income, but according to some authors, even the much higher income-portions are not rare. On the bases of the prostitutes’ statements, only the smaller portion of income deriving from prostitution is remain at them, the bigger portion of it they have to give to their procurers.
During the compilation of GDP it has to be taken into account, that some costs (intermediate consumption) of prostitutes were already counted among the household consumption, so a certain part of purchased household’s consumption became intermediate consumption in the backward calculation when the estimation of prostitution was introduced. That is why the household consumption figures with these amounts (e.g. 20.7 billion HUF in 2002) were reduced and put them into the accounts as intermediate consumption. The estimated imports for prostitution comprises mainly illegally imported magazines and films or special accessories. The estimation is based on police and custom data and other studies.
In contrast to the possessors of drug trade, the Hungarian criminal clans have domination over the prostitution.
