Teenage juvenile drug dealers often make boastful claims that they
make $10,000 a week, which are reported in the press. Likewise,
domain name speculators often make claims to have made $10,000+
and the most extreme claims are reported in the press.
Have 15-year-old drug dealers made $10,000 in a week? Maybe one
out of a hundred had a $10,000 week, in addition to bad weeks when
they made little or lost their “investment” to the police, rivals or bad
debts – similar to a cybersquatter losing a domain name.
Does the average 15-year-old make $10,000 a week selling drugs in the
ghetto? Does the average domain name sell for $10,000?
There are two ways to look at this. One way would be with statistics.
It would be rather easy to show that nurses don’t earn $10,000 a week
with statistics. However, drug dealer don’t report their income.
Likewise, there is a dearth of statistical information on domain name
sales.
There are examples, but no comprehensive statistics. It may be
possible to point to a few true cases where teenage drug dealers
actually earned $10,000 in a week. Likewise, it is possible to point to
the many cases of teenage drug dealers earning only $100 per week.
But without comprehensive data or some knowledge of the distribution,
it’s difficult to determine the average from small biased samples.
Likewise, it’s possible to point to examples of similar domain names
selling for $100 (a fire sale at an auction), $1,000 (the most common
price), $10,000 (one out of a thousand) and $100,000 (one out of a
million).
The other way is to look at the supply and demand. Is $10,000/week
an equilibrium price for teenage drug dealers? The supply of teenage
drug dealer – at any high school in the country – is so large that no toplevel
dealer would pay them $10,000 per week. In economics terms,
it’s not an equilibrium at $10,000 per week. Likewise, the high prices
reported for domain names are not equilibrium prices.
If you would like to make a comment, please fill out the form below.
