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Concerning the Brazilian Virginity Auctioneer, A Few Thoughts

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This would be a good time to remind you all that this is my personal blog, and not a real estate blog.

Since this has nothing whatsoever to do with real estate, please skip it if you’re one of my readers who are only into real estate stuff.

The Talented Miss Migliorini

The Telegraph reports on this wondrous story from the sunny precincts of Brazil by way of Australia:

Catarina Migliorini, 20, was the subject of 15 bids, with a Japanese man named only as Natsu winning on Wednesday night, Australian media reported.

They said Miss Migliorini would be “delivered” to her buyer on board a plane to Australia and that she would be interviewed before and after losing her virginity at a secret location.

This was apparently part of some documentary film or something. Her family is reported to be overjoyed for her.

There are a few interesting things to think about here.

Moral Philosophy

Obviously, most people will immediately focus on what Miss Migliorini did here. She sold something on the open market, via Internet auction no less, that most women do not put up for sale. If you’re looking for signs of decline of Western Civilization, this looks like at least a check mark on the “Yes” side of the ledger.

But there was a fascinating corollary to this. Miss Migliorini, and her family, don’t see a problem here:

“I saw this as a business. I have the opportunity to travel, to be part of a movie and get a bonus with it,” she told Folha newspaper.

“If you only do it once in your life then you are not a prostitute, just like if you take one amazing photograph it does not automatically make you a photographer.”

The first point is that she and her family saw “this” as a business. Well, when you think about it that way… what exactly is wrong with her decision? People and companies offer all sorts of products and services that other people do not as a business.

In some ways, her business is far better for society than say, a beer company, no? As far as I can tell, her decision to sell her virginity harms no one but herself, if it is harm at all to be paid $780K for a one night stand that she eagerly volunteered for.

Sure, there’s probably some harm to the concept of male-female relationships, to social mores, etc. But I was under the impression I wasn’t supposed to pass judgment on someone else’s sexual lifestyle or personal choices. So the response is… interesting.

Of course, the idea that if you only do something once in your lifetime, you are not a professional… it’s a revolutionary breakthrough in moral philosophy. Normal moral philosophy of any stripe stands for propositions like, “If you steal even once, you are a thief… until you are rehabilitated.” According to Miss Migliorini, that ain’t true. As Kundera wrote in Unbearable Lightness of Being, einmal ist keinmal: once is never. Fascinating.

One wonders, however… how many times does it take before one is a “professional”? How many amazing photographs must one take before he is considered a photographer? How many sex-for-cash transactions before she is considered a prostitute?

Economic Questions

One of the first things that popped into my mind — and I confess that this was the first thing is a clear sign of my oddness — is whether the $780,000 in income for Miss Migliorini should be taxed as ordinary income, or as capital gains.

See, ordinary income applies if the money is the result of a business activity — and she claims that she saw this as a business. Since she doesn’t appear to be a corporation, Brazil appears to tax her at 27.5% of income, or $214,500 in this case.

But she also said that this was a once-in-a-lifetime deal, for the unavoidable reason that she can only sell her virginity once. Well, that seems more like a sale of an asset — a longterm asset at that, since she has had this “asset” for 6 years (the age of consent is 14 in Brazil). That would be more of a capital gains rate. (And her basis is zero, obviously.) That means Brazilian capital gains tax rate of 15% kicks in instead, so her tax burden would be only $117,000.

I’d love to see the Brazilian tax court holdings on the case of Miss Migliorini.

Then there’s the matter of pricing. $780,000 seems like a rather lot of money for a single act, which is available in Nevada and various non-American cities for significantly less. Clearly, the price is impacted by supply and demand, but less well-known is the principle that price in turn impacts both supply and demand, until we get to equilibrium.  Given the price paid for this young woman’s virginity, is it impossible to imagine that supply will go up, slowly driving prices down?

Inquiring minds wonder what the equilibrium clearing price is for this particular asset.

Legal Questions

And then we have the question of whether her parents are legally owed some part of this money. Miss Migliorini did not create the asset in question; she was provided it at no charge when her parents gave birth to her. Was that a gift? Was it an investment? If Miss Migliorini refuses to share any of the cash with her family, do they have a claim against her for a part of the profits?

Finally, seems to me that this should be celebrated by the family traditionalists out there. If you don’t want your daughters engaging in premarital sex, you now have a powerful weapon on your side. Today, if your underaged daughter falls for the captain of the football team and takes a tumble in the hay, all you can do is fume… or maybe bring a criminal action for statutory rape. But if the young man is also a minor, depending on the laws of your state, you may not have a case (so-called “Romeo and Juliet” clauses). The popular stories of dad polishing their shotguns in front of the boyfriend are fun, but realistically, you’re not going to shoot the young man and get away with it. Nor does shooting the boy do anything for your daughter.

After this, however, it appears clear that there is a market value to your daughter’s virginity. You can bring a civil action for theft against the young man and his family. It doesn’t matter then that your daughter was in love and wanted to do it just as much as the boy. Since she is underaged, she cannot make a disposition of an asset without parental permission. (See, e.g., Illinois law on property rights of minors).

If you approve of the boyfriend, then you can sign a waiver of some sort, essentially giving him a gift. (Note: he and his parents may have some income tax consequences from this.) If you do not, then you can sue to recover irrevocable damages to her assets. After all, perhaps your daughter could have sold her virginity on the Internet for $780,000 as well… except for Mr. Quarterback over there.

Obviously, this theory of virginity as an asset has never been tested in an American court. But if minors cannot sell sperm without parental consent, I think a strong case can be made that a minor cannot sell or give away her virginity without parental consent.

The parents of boys must suddenly be concerned with financial consequences of their sons gettin’ it on with some young lass. Today, they only worry if their sons get a girl pregnant. If the asset-value of virginity theory takes hold, however… well, they’d better up the umbrella liability policy some, and have a serious discussion with the young bundle of hormones. Moms and dads won’t be saying, “If you’re going to do it, practice safe sex, son”. It’ll be that, plus, “And, if you absolutely can’t help yourself, make damn certain she ain’t a virgin. Get her to sign this affidavit that our family lawyer has prepared.”

Finally, the issue of equality. Given that female virginity is so highly valued, and male virginity is not at all valued… resulting in all men, through no fault of their own by virtue of their being born a man, starting out with some number of dollars in assets less than a woman… how should society address the rank inequality between the sexes?

Conclusion

Oh please. If you haven’t been chuckling your way through this whole thing, well… I’m sorry. Cause I was while writing it.

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Rob Hahn
Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.