This document discusses why drug dealers often continue living with their mothers even if they make a substantial income from drug sales. It notes that while drug lords can make millions per year, street-level drug dealers only make a few dollars per hour. Lower-level dealers face significant risks from law enforcement and violence from rivals which limits their ability to accumulate wealth. Additionally, the document explores how the meth industry has vertically integrated, allowing it to be produced locally with common chemicals, reducing risks and costs compared to other drugs and enabling dealers to continue living with their families

1. Moving Out of
Mama’s
House?

2. Freakonomics Chapter 3:
Why Do Drug
Dealers Still Live
With Their Moms?

3. High School Football Player Pro Football Player
$0 average of $1.4M per year
Joe Montana

4. Street Dealer Drug Lord/Kingpin
$1m - $200m+ per
$3/hour
year
Pablo Emilio Escobar Gaviria

5. Both Live With Mommy

7. a chance to...

8. Make it
B$G

9. Then:
Crack

10. Now:
Meth

11. Cheap
Potent
Bang for buck

12. Cheaper
More potent
More bang for buck

13. and...

14. V
e
r
t
integration
c
a

15. Coca: Horizontal integration

16. Meth: Vertical integration
Production
Transportation
Sales

17. Can be made anywhere
Made by common chemicals
Eliminates need from supplier
Quality control

18. No longer transporting over several borders
Less product seized
Control of distribution

19. No middle men
Less risk
More Control
MORE PROFIT

20. Markets

21. Regular People

22. Famous People

23. Famous People

24. C
he a p Quality

25. Supply and Demand

26. Demand for quality
Quality = Purity = Potency

27. 2007:
39%
2011:
90%

28. Crack on Steroids

29. August 28, 2012
Man Stabbed in arm
Argument over quality of meth
http://sfappeal.com/news/2012/08/fight-over-meth-ends-with-taser-shock-stabbing.php

30. War on Drugs

31. Government
involvement
More Risk
More Seizure
Higher Prices

32. Supply
Price
Demand
Quantity

33. Gov involvement
Supply
Price
Demand
Quantity

34. 2010 - 6,768 makeshift
labs discovered

35. Surplus
Supply
Price
Demand
Quantity

36. What about
Moving Out of
Mama’s
House?

37. Make it
BIG

39. Probably Still Living with Mom

40. 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.econom
ist.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_p
olitics/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>.