Edgy Economics

I’ve become interested lately in the economics of illegal or semi-legal activities, an area that seems to be utterly under-researched, and which I think could make a really good honours or masters thesis. To name just a few areas, I think it would be fascinating to have good studies of the hourly wages and employment patterns of panhandlers, traffic-light window washers, and drug dealers. Any entrepreneurial economics students who don’t mind collecting some of their own data, feel free to email me: andrew.leigh -at- anu.edu.au.

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7 Responses to Edgy Economics

  1. martin says:

    The Freakonomics guy did some work on the economics of being a drug dealer

    An Economic Analysis of a Drug-Selling Gang’s Finances
    SD Levitt, SA Venkatesh – The Quarterly Journal of Economics, 2000 – JSTOR

    It is quite interesting

  2. conrad says:

    I always wondered about that too — when heroin was ridiculously cheap in Melbourne in the late 90s, I wondered whether the dealers running around could have made more money simply by doing things like selling fruit near train stations (more preferable than the vending machine), or other probably illegal things than no-one is going arrest you for.

  3. Jose says:

    In some cities in Mexico, on those busy streets in which you may park, there are guys who early in the morning block parking spaces (with boxes, rocks, whatever) and rent those spaces to drivers who are willing to pay them. What services do these guys sell? In theory, they take care of your car. I am sure that there are streets where business is really good.

    Good luck with your project.

  4. Patrick says:

    Some french agency just did produce a large report on drug dealers.

    In short, the lowest level earnt barely minimum wage, the ‘grossistes’ (wholesalers’ earned around €500,000 pa.

    I’ll send a link tomorrow.

  5. christine says:

    Collect their own data? But that is not the economist’s way!

    I think maybe you’d want to start them off on pan handlers; drug dealers seems rather too entrepreneurial for an honours thesis.

  6. Patrick says:

    That report on drug dealer earnings in France.

  7. conrad says:

    Merci, Patrick. That confirms what I thought — that the little end guys actually earn diddleys. I guess at least it gets them around tax in France.

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