Why Drug Dealers Still Live with Their Moms

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Why Drug Dealers Still Live with Their Moms
Power-Law Distributions
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Experts, Journalists and Conventional Wisdom

• Annual Labor Day statistics on womens earnings
• They are paid only 76 cents to mens dollar for
  the same work.
• DISCRIMINATION!!!
• Logical follow-up question If an employer has
  to pay a man one dollar for the same work a woman
  would do for 76 cents, why would anyone hire a
  man?

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Experts, Journalists and Conventional Wisdom

• High pay, as it turns out, is about tradeoffs.
• Is the pay gap, then, about the different choices
  of men and women?
• Does this imply that mothers sacrifice careers?

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Experts, Journalists and Conventional Wisdom

• Dont women, though, earn less than men in the
  same job?
• (Source an unpublished table compiled by the
  Bureau of Labor Statistics)
• WOMEN MEN
• Sales Engineer -- 89,908 62.660
• Engineering managers -- 82,784 76,752
• Aerospace engineers -- 78.416 70,356
• Financial analysts -- 69,004 58,604
• Radiation therapists -- 59,124 53,300
• Statisticians -- 49,140 36,296
• Tool and die makers -- 46,228 40,144
• Speech pathologists -- 45,136 35,048
• Advertising managers -- 42,068 40,144
• Agricultural scientists -- 41,704 39,156

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Experts, Journalists and Conventional Wisdom

• 1990s Crack cocaine is fostering a very affluent
  criminal underclass that could overwhelm police
  offers in terms of weapons and resources!
• If so, why did most of the crack dealers still
  live in the projects with their moms?
• The answer, as always, lies in the data.
• Drug dealers are rarely trained in economics, and
  economists rarely hang out with crack dealers.

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Experts, Journalists and Conventional Wisdom

• Univ. of Chicago grad. student Sudhir Venkatesh
  (Indian)
• - What did subsequent data collection efforts
  reveal about the gangs crack cocaine operations?
• If drug dealers make so much money, why are they
  still living with their mothers?
• - Answer How much money do they actually make?
  
• - 2nd Answer What is their chance of being
  killed?

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Experts, Journalists and Conventional Wisdom

• Rising to the top of drug dealing is not unlike
  rising to the very, very top of any profession.
  What is it like?
• RULES
• You must start
• You must be willing to work
• You must be more than
• Once you realize that you wont make it, you will
  ...
• Crack cocaines devastating effect on the African
  American community

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When Only the Best Will Do Maximizing vs.
Satisficing

• Fred Hirsch The more affluent a society
  becomes, and the more basic material needs are
  met, the more people care about goods that are
  inherently scarce (e.g., elite colleges, elite
  homes, elite preschools, elite club memberships,
  elite vacations, etc.)
• e.g., supply and demand and college admissions

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Maximizing, Satisficing Managing Choices

• Lesley Stahl reports on the controversial trend
  of
• parents allowing teens to drink alcohol in their
• homes in efforts to prevent drunk driving.  
• (Photo AP)

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Power-Law Distributions