In Chapter 3 of Freakonomics by Levitt and Dubner, an interesting idea is put to question, which is why drug dealers live with their moms. The reason that this question is interesting is because of the stereotype that drug dealers make a lot of money, otherwise, why would you be a drug dealer. Levitt and Dubner explain the answer to this question by analyzing the field work of a University of Chicago student, named Sudhir Venkatesh. They follow the work he did in Chicago on the crack market there and found some shocking and interesting results.
They first address the large problem of crack dealing that is going on in Chicago’s many housing projects. After looking at Venkatesh’s studies, as well as the notebooks obtained from a member of the gang, Levitt and Dubner make several interesting conclusions about how the specific gang, the Black Disciples, actually worked. They break down the chain of command of the gang, relating it almost directly to McDonald’s chain of command, with a board of directors, and so on. They go on to break down the financial structure of the gang to answer the question presented in the chapter and find out why drug dealers aren’t as rich as they are made out to be.
Using a series of accurate statistics, recorded in the gang’s ledgers, Levitt and Dubner can accurately address the question and find an answer. First, they explain the growth boom that occurs and where that money goes. On page 97, they show the monetary expansion quadrupling “from $18,500 a month to an astonishing $68,400 a month”. They use this statistic to show how much money is made per month; however, they couple it with another statistic on page 99, showing that the gang section’s leader, J.T. would “make $8,500 per month (roughly $66 per hour) in contrast to his foot soldiers earning only $3.30 an hour”. This statistic shows the dramatic gap between members of the gang and it helps show how most drug dealers don’t actually make much money at all. Additionally another statistic that Levitt and Dubner use to further strenghten this point, found on page 100, is “that the top 120 men in the Black Disciples gang represented just 2.2% of the full-fledged gang membership but took home well more than half the money.” This shows just how much the few men were making and how roughly 98% of the drug dealers in just that gang were making nearly nothing.
Finally, Levitt and Dubner use another statistic to express another interesting point. On page 101, they show that if you were a foot soldier in the gang, (making $3.30 and hour) you had “a 1-in-4 chance of being killed.” They relate that statistic to the odds of a timber cutter, which is considered to be the most dangerous job in America, where they experience a “1-in-200 chance of being killed.” It is obvious that it is not worth it at all to be a foot soldier, which is why, after a year or two and realizing how little they get paid, the men drop out.These, along with several other reasons, show exactly why drug dealers still live with their moms. It is because the vast majority of them make such drastically little pay compared to the few that actually run the show.
schuch04 
The growth boom was a significant statistic that I did not put within my four, however I believe is interesting and ties into a statistic I did use. I want to focus on the correlation between the growth boom and the increase in homicide rates in black youth. While the gang was making more money, the authors note that since crack hit the scene in black communities, homicide rates among black youth have quadrupled. The increase between revenues and homicides have both gone up at an almost 4:1 ratio. I was surprised to see the paralleled increase in expansion of both money and violence and would have thought that money would have expanded at a greater pace than homicides.
-Drew