Evidence suggests that economic factors play an important role in commercial sex work, in particular we see that condomless sex commands a price premium relative to condom protected sex. This paper explores whether the use of an effective new HIV prevention product, pre-exposure prophylaxis (PrEP), could change the price and quantity of condomless commercial sex supplied.

We collected stated preference data from 122 HIV negative female sex workers (FSWs) in urban South Africa, using a repeated choice experiment to simulate the impact of using PrEP on choices. Results suggest that the price premium for condomless sex would decrease by 73% with PrEP use (described as 100% effective in preventing HIV). Simulations suggest that the quantity of condomless sex supplied would double.

We use these results to parameterise a dynamic HIV transmission model, which accounts for changes in the economics of sex work. We simulate the impact of PrEP on the HIV epidemic under different assumptions of how the market for commercial sex is affected by the introduction of PrEP.

We estimate that without considering economic factors, PrEP use will result in an 8.3% reduction in HIV prevalence over 20 years. Accounting for risk compensation among product users, product impact is reduced by 2 percentage points. We also simulate how reducing risk and prices may change the supply mix of sex workers, both women using PrEP and their colleagues who do not but who are still affected by operating in a competitive market. When competition is considered between users and non-users, the impact of PrEP is fully negated.