First off Suzanne, quite a meaty topic.  

Well, using the model of how the pilot programs for legalization of cannabis is going in Washington State and Colorado, I'm going to take the side that donation rates would actually drop.  

Here's the thing, again using the pilot programs of cannabis as a measuring stick, we've actually seen that the prices for cannabis have dropped and leveled out. In Colorado, dispensaries are popping up like Starbucks (all over the place) business is booming, supply has increased, therefore, prices have leveled off or dropped. In the cannabis industry this equals thinner margins - but it's still a huge business, so thin margins or not, there is a green rush that's going on in Colorado and Washington State.  

Take that same model and apply it to the hobby, with widespread availability (and I know someone will argue about The Bunny Ranch prices, but that is not considered widespread availability) and the margins for profit will definitely change. No doubt there would be new business expenses that would need to be factored into the metrics, but when you throw the spin of widespread availability into the mix, that brings down the overall pricing. When the "taboo" factor is gone, the tried and true business model of supply and demand takes root.  

But then again, that's just my .02 cents - I don't claim to be an economics professor at NYU Stern School of Business, so what do I know. LOL!

nyca

If the hobby was legalized, more ladies may become interested in venturing into the hobby.
We would expect an increase in the number of providers, but not necessarily an increase in the number of hobbyists.

With more ladies in the "labor force," the competition for the available hobbyists will be fierce.
If a situation like that were to occur, one way for a provider to remain competitive is to lower her rates.

When a business is a monopoly for a desirable product, they can charge any price they want since they have no competitors.
If there were more providers in the hobby, it does not make sense for prices to go up since the availability of providers will be widespread and there will be many options to choose from.

I won't try to match the EconoHobbyists who opined.
But I think they could go higher - thanks to the regulation part.
  I'm no Tea Party-er  -- but it's Rules and regulations that take the fun out of our . . . well, fun.

I think that legalization (and regulation) would bring many more girls AND guys into the biz.  However, I think many would still wish to avoid a paper trail of government permits and licenses and would stick to the shady side.  

There are also likely to be many ladies who are in the US legally but officially not allowed to work (student visas; tourist visas; other non-working visas) who would only be able to do this off the records.  There are also likely many who are in the US illegally and have to stay off the radar completely.  

So, to answer the question ... I think that the legalized rates would increase due to taxes and fees but that the black market would remain about the same.  Or maybe the black market would drop in price with legal competition?  Or maybe the black market price would go up (but not as much) if the price of the competition also went up

I think if it was legal there would be an influx of "fast food" -- a ready availability of cheap alternatives. The women who charge premium prices would continue to -- even higher to compensate for taxes. People would pay them because they already don't mind paying luxury prices. The women who charge reasonable rates now would feel the pinch though, I think. They would feel they need to compete on price and would probably have to lower their prices even though they would be paying taxes too, thus lowering their net income. So it seems to me only providers on the low end (to make money) and the high end (to avoid their biggest threat--tax evasion charges) would favor legalizationm

Donations should be flexible. I always agree to donate what providers ask for but I always increase it depending on the services. When I like the service and ask for a repeat I surprise the provider by giving more during our next date.