Why Drug Dealers Still Live with Their Moms & Power-Law Distributions

“Experts,” Journalists and Conventional Wisdom Annual Labor Day statistics on women’s earnings: They are paid only 76 cents to men’s 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?

“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?

“Experts,” Journalists and Conventional Wisdom Don’t 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 (Source: an unpublished table compiled by the Bureau of Labor Statistics) WOMEN MEN Sales Engineer -- $89,908 $ Engineering managers -- $82,784 $76,752 Aerospace engineers -- $ $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

“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.

“Experts,” Journalists and Conventional Wisdom Univ. of Chicago grad. student: Sudhir Venkatesh (Indian) - What did subsequent data collection efforts reveal about the gang’s 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? - 2 nd Answer: What is their chance of being killed?

“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 won’t make it, you will... Crack cocaine’s devastating effect on the African American community

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)

Managing People’s 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 don’t we do it? Why does the economic perspective clash with the moral perspective?