We analyze a unique data set detailing the financial activities of a drug-selling street gang on a monthly basis over a four-year period in the recent past. The data, originally compiled by the gang leader to aid in managing the organization, contain detailed information on both the sources of revenues (e.g. drug sales, extortion) and expenditures (e.g costs of drugs sold, weapons, tribute to the central gang organization, wages paid to various levels of the gang). Street-level drug dealing appears to be less lucrative than is generally thought. We estimate the average wage in the organization to rise from roughly $6 per hour to $11 per hour over the time period studied. The distribution of wages, however, is extremely skewed. Gang leaders earn far more than they could in the legitimate sector, but the actual street-level dealers appear to earn less than the minimum wage throughout most of our sample, in spite of the substantial risks associated with such activities (the annual violent death rate in our sample is 0.07). There is some evidence consistent both with compensating differentials and efficiency wages. The markup on drugs suggests that the gang has substantial local market power. Gang wars appear to have an important strategic component: violence on another gang’s turf shifts demand away from that area. The gang we observe responds to such attacks by pricing below marginal cost, suggesting

This document was prepared under Cooperative Agreement number 95--JD--MU--K001 from the Office of Juvenile Justice and Delinquency Prevention (OJJDP), U.S. Department of Justice. Points of view or opinions expressed in this document are those of the authors and do not necessarily represent the official position or policies of OJJDP or the U.S. Department of Justice. Responses to the 1997 National Youth Gang Survey were submitted voluntarily by law enforcement agencies throughout the country. Readers are cautioned against basing judgments on the nature or extent of the gang problem in a particular locality solely on the data presented here. Because of differing methodology, definitions, and sampling techniques, caution is also urged in making direct comparisons between these data and data obtained in other surveys.

rapy-based, multifamily group approach to preventing juvenile delinquency (McDonald, 1993, 1997; 1998; McDonald and Billingham, 1998; McDonald et al., 1991). FAST has been especially successful at involving lowincome, stressed, and isolated parents. For several years, the founder of FAST conducted court-ordered, in-home, family therapy with drug- and alcohol-involved and violent youth who had been significantly involved in the court system. She applied family therapy techniques for delinquents that were developed, researched, and published by James Alexander, Ph.D. (1973; Alexander and Parsons, 1973, 1982) and Salvador Minuchin, M.D. (1979). Using these approaches, 75 percent of delinquent youth could alter their circumstances in 3 months of two to three family sessions per week, with 24-hour backup coverage (McDonald, 1993). This therapeutic work developed into the FAST program for early intervention. The FAST program works with school teachers to identify elementary school children a

I am grateful for critical readings of this paper

The author(s) shown below used Federal funds provided by the U.S. Department of Justice and prepared the following final report:

Studies of criminal behavior have demonstrated both that there is a career component to criminality and that key turning points in the life course can have large and potentially long-term impacts on criminal involvement (Sampson and Laub 1993). For inner-city youth, the decision to join a gang is considered to be one of the most important decisions. Sociologists and criminologists both cite the early contemplation of,

of the authors and do not necessarily represent the views of the Office of Juvenile Justice and Delinquency Prevention, nor the official position or policies of the United States government.

provide national leadership in addressing the issues of juvenile delinquency and improving juvenile justice. OJJDP sponsors a broad array of research, program, and training initiatives to improve the juvenile justice system as a whole, as well as to benefit individual youth-serving agencies. These initiatives are carried out by seven components within OJJDP, described below. Research and Program Development Division develops knowledge on national trends in juvenile delinquency; supports a program for data collection and information sharing that incorporates elements of statistical and systems development; identifies how delinquency develops and the best methods for its prevention, intervention, and treatment; and analyzes practices and trends in the juvenile justice system. Training and Technical Assistance Division provides juvenile justice training and technical assistance

provide national leadership in addressing the issues of juvenile delinquency and improving juvenile justice. OJJDP sponsors a broad array of research, program, and training initiatives to improve the juvenile justice system as a whole, as well as to benefit individual youth-serving agencies. These initiatives are carried out by seven components within OJJDP, described below. Research and Program Development Division develops knowledge on national trends in juvenile delinquency; supports a program for data collection and information sharing that incorporates elements of statistical and systems development; identifies how delinquency develops and the best methods for its prevention, intervention, and treatment; and analyzes practices and trends in the juvenile justice system. Training and Technical Assistance Division provides juvenile justice training and technical assistance

addressing the issues of preventing and controlling juvenile delinquency and improving the juvenile justice system. OJJDP sponsors a broad array of research, demonstration, and training initiatives to improve State and local juvenile programs and to benefit private youth-serving agencies. These initiatives are carried out by seven components within OJJDP, described below. Research and Program Development Division develops knowledge on national trends in juvenile delinquency; supports a program for data collection and information sharing that incorporates elements of statistical and systems development; identifies the pathways to delinquency and the best methods to prevent, intervene in, and treat it; and analyzes practices and trends in the juvenile justice system. Training and Technical Assistance Division provides juvenile justice training and technical assistance to Federal, State, and local governments; law enforcement,