leaving mamashouse

Moving Out of Mama’s

House?

Freakonomics Chapter 3:

Why Do Drug Dealers Still Live With Their Moms?

High School Football Player Pro Football Player

average of $1.4M per year$0

Joe Montana

Street Dealer Drug Lord/Kingpin

Pablo Emilio Escobar Gaviria

$3/hour$1m - $200m+ per

year

Both Live With Mommy

a chance to...

Make it

B$G

CrackThen:

MethNow:

CheapPotentBang for buck

CheaperMore potent

More bang for buck

and...

V

lacitrentegratio

n

Coca: Horizontal integration

Production

Transportation

Sales

Meth: Vertical integration

Can be made anywhereMade by common chemicals

Eliminates need from supplierQuality control

No longer transporting over several borders

Less product seized

Control of distribution

No middle menLess risk

More Control

MORE PROFIT

Markets

Regular People

Famous People

Famous People

QualityChe

ap

Supply and Demand

Demand for quality

Quality = Purity = Potency

2007:

2011:

39%

90%

Crack on Steroids

August 28, 2012

Man Stabbed in arm

http://sfappeal.com/news/2012/08/fight-over-meth-ends-with-taser-shock-stabbing.php

Argument over quality of meth

War on Drugs

Government involvement

More Risk

Higher Prices

More Seizure

Price

Quantity

Supply

Demand

Price

Quantity

Supply

Demand

Gov involvement

2010 - 6,768 makeshift labs

discovered

Price

Quantity

Supply

Demand

Surplus

What about Moving Out of Mama’s

House?

Make it

BIG

Probably Still Living with Mom

Works Cited Cohen, Arianne. "New York Magazine." 'Nick' N.p., 3 June 2007. Web. 18 Jan. 2013. <

http://nymag.com/news/features/2007/profit/32888/>. "The Current Status of the Methamphetamine Epidemic." The Current Status of the

Methamphetamine Epidemic. N.p., n.d. Web. 18 Jan. 2013. <http://carnevaleassociates.com/meth_2011>.

"Massachusetts." The Republican. N.p., 11 Oct. 2012. Web. 18 Jan. 2013. <http://www.masslive.com/news/index.ssf/2012/10/mexican_drug_cartels_flooding.html>.

"Methed Up." The Economist. N.p., 24 Mar. 2012. Web. 14 Jan. 2013. <http://www.economist.com/node/21551026>.

Shafer, Jack. "What the Press Didn't Learn from the Last Drug Panic." Slate Magazine. N.p., 23 Aug. 2005. Web. 18 Jan. 2013. <http://www.slate.com/articles/news_and_politics/press_box/2005/08/crack_then_meth_now.html>.

Smith, Nick. "The Economics of Drugs." Stuff. N.p., 1 Mar. 2010. Web. 18 Jan. 2013. <http://www.stuff.co.nz/business/3203328/The-economics-of-drugs/>.

Thornton, Mark. "The Ludwig Von Mises Institute." What Explains Crystal Meth? Ludwig Von Mises Institute, 20 Jan. 2011. Web. 14 Jan. 2013. <http://mises.org/daily/4971>.

Yglesias, Matthew. "Could Walter White Really Gain an Edge by Selling Premium Drugs?" Slate Magazine. N.p., 17 Sept. 2012. Web. 18 Jan. 2013. <http://www.slate.com/articles/business/moneybox/2012/09/breaking_bad_s_blue_sky_meth_would_addicts_really_pay_more_for_higher_quality_.html>.