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

I am grateful for critical readings of this paper

bservers of the behavioral sciences have long noted the dominance of cross-sectional over longitudinal research designs, and have catalogued some of the negative consequences of this focus (e.g., Lieberson 1985). Perhaps the most important strength of this volume is that from the outset, the editors strongly insisted that all contributors had to take a longitudinal perspective in their individual chapters. Approaching crime trends from a longitudinal point of view immediately disabuses us of the idea that criminal behavior and reactions to criminal behavior are fixed, constant, and unchanging. Criminologist Gwynn Nettler (1984, 2) tells the story of two people passing on a street in New York City, one with a pint of whiskey and one with $100 in gold coins. In March 1933, the person with the alcohol would have been committing a criminal act because of Prohibition, while the person with the gold coin was law abiding. But only a year later, the same two people passing on the street would occupy exactly the opposite positions with regard to the law: The repeal of Prohibition legalized carrying whiskey in most places, but gold hoarding was a Federal crime from 1934 to 1974. This volume describes many similar kinds of changes in crime and reactions to crime over the past half century. In particular, the contributors have thoughtfully explored the many ways in which crime and its effects have evolved along with broader structural and cultural changes in America during this time period. But the volume is not limited to discussing how crime has changed in the past. Wherever feasible, the authors have also tried to project likely crime developments and trends into the 21st century. I N