Why Drug Dealers Still Live with Their Moms

1
Why Drug Dealers Still Live with Their Moms
Power-Law Distributions
2
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?

3
Experts, Journalists and Conventional Wisdom

• High pay, as it turns out, is about tradeoffs or
  CHOICES made by people responding to different
  incentives!
• The pay gap, then, is about the different choices
  of men and women.
• Does this imply that mothers sacrifice careers?

4
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• (Source an unpublished table compiled by the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

5
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.

6
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?

7
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

8
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)

9
Managing Peoples Choice Power-Law Distributions

• - 80/20 rule
• LAPD and bell curves
• extreme concentration of bad officers
• Homeless people
• 80 in and out in 1 day
• 10 episodic users 3 weeks at a time, frequent
  drug users
• 10 chronic, mentally ill, physically
  disabled, MOST expensive
• Solving car pollution, bad officers, chronic
  homelessness would be cheaper than managing it,
  so why dont we do it?
• Why does the economic perspective clash with the
  moral perspective?