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Economics : Why Drug Dealers Still Live With Their Mothers

Decent Essays
“Economics is a science primarily concerned with incentives, it is also one with statistical tools to measure how people respond to those incentives” (Levitt and Dubner, 2005). After reading the book Freakonomics, I more than ever believe that virtually any subject can be picked, and somehow “fit” into economics. To once again quote Levitt and Dubner, “economics is explaining how people get what they want or need”. (Levitt and Dubner, 2005).
One of the most interesting topics the two authors of Freakonomics, broached in the book was why drug dealers still live with their mothers. The drug they specifically examined was crack cocaine, and data was obtained from a specific gang, which in my opinion, was actually more of a firm/business. To quote our authors once again, “a crack gang works pretty much like the standard capitalist enterprise: wages are about as skewed as wages in corporate America. Criminals, like everyone else, respond to incentives” (Levitt and Dubner, 2005). This gangs’, or firms’, members all operated based on the incentives that they believed existed. Most of them made very little money, and in fact, probably still lived with their mothers. But the few, “higher ups”, in the firm were making large amounts of money, and gave those below them incentive to work hard with the intention of becoming one of the “higher ups” themselves.
A gang, has a manager, “a person that directs resources to achieve a goal” (Baye and Prince, 2014). Just as with the majority
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