Even an organization as lowly as a street gang operates according to economic principles, says a recent study published by the National Bureau of Economic Research. Economist Steven Levitt of the University of Chicago and sociologist Sudhir Alladi Venkatesh of Harvard University suggest that gangs are like franchises. In a gang they studied, at the top were a leader and three officers, followed by 25 to 75 "foot soldiers," with an additional 60 to 200 rank-and-file members who paid dues to the gang in return for protection and a reliable supply of drugs.

Drawing on account "books" kept by a gang leader over a four-year period, the economists found that the foot soldier members who sold drugs on the streets earned at or below minimum wage during the height of the crack cocaine epidemic in the eastern U.S. in the late 1980s and early 1990s.

• Over the period, while the gang's profits roughly doubled as it grabbed turf from a rival group and demand for crack expanded, costs -- for weapons, mercenary fighters, bribes and so forth -- also rose.

• The gang leader made from $50,000 to $130,000 per year -- not counting the 10 percent extra he probably made "off the books."

• Active gang members had about a one-in-four chance of dying over the four-year period studied -- with a death costing the gang up to $5,000 in family compensation and funeral expenses.

• The gang also made money through extortion -- charging grocers and other local businesses "street taxes" for letting them operate on its 12 square blocks of turf.

The gang was one of about 100 in a multistate organization. Like franchisees, each gang paid the parent group about 20 percent of its take for exclusive rights to its turf.