TALKING POINT
Lipstick Effect And Other Unconventional Economic Indicators
By Boniface Ngahu
In the past we highlighted several unconventional economic indicators . Now that we are faced with a situation of the worst global economic recession since the Great Depression as a result of the pandemic among other causes it would be a good time to revisit the indicators and explore others . We are therefore going to look at different indicators coupled with plausible evidence of their ability to predict the economic direction .
Lipstick Effect Index and Mating Psychology
The Lipstick Effect is based on the observation that during tough economic times the sales of this lip cosmetic rise . This was observed by Leonard Lauder the Chairman Emeritus of Estee Lauder who claimed that it is countercyclical since it goes against the economic grain . This claim is also backed by research . Sarah
Hill , Andrew White and others who studied the “ Lipstick Effect ” found that in addition to proving it is real they also found that it is “ deeply rooted in women ’ s mating psychology ”.
Hill further explained in the Scientific American that manufacturers of other non-essential industries like cosmetics don ’ t usually get to struggle during economically tough times . She further noted that L ’ Oreal sales grew by 5.3 % during the 2008 financial crisis . She observes that in times of scarcity women find that availability of quality and financially secure men become relatively scarce . She relates this to higher unemployment rates or low returns on investments during economic recessions . Hill conducted four separate experiments which all confirmed the effect exist , she notes that women ’ s appetite to buy other competitiveness increasing products such as high heeled boots , designer jeans
During the 2008 financial crisis as the Dow Jones Index hit a five year low in November Match . com noted a strong spike pattern in traffic , the same pattern had been noted during September 11 attacks . Similarly , during current crisis I have heard the term ‘ Corona Babes ’ being used to describe some of the results of emergency dating in order to have emotional support during the crisis . and perfumes also increases during bad ‘ quality mates and economic ’ market times .
In the ‘ New Normal ”, the Eyes Have It
The ‘ new normal ’ as a result of the Covid-19 throws in some spanner into the works . This is because according to the WHO ” s and national public health protocols it is compulsory to wear masks whenever in public as a preventive measure of controlling the spread of the virus . This may relegate lipstick to nonessential category and hence reduce the sales . While we have confirmed that sales of lipstick have declined recently , higher quality lipstick that may not stick on the mask or smudge have registered higher sales than before . Eye products such as mascara have registered sales increases compensating for the lost lipstick sales . The lips still have to look good when exposed and in teleconferences but as the always exposed part , the ‘ eyes have it ’.
First Date , Corona Babes and Divorce Rate Indices
The first date index is another signal of a bad economy , this is because as resources become scarce people get lonely and seek first dates . Those who watch this index closely have noted that as more people go on first dates the stock market index go down as prices of listed shares reduce due to weak market sentiments . It follows that the higher the traffic in Tinder among those who want to meet for the first time the worse the economy . During the 2008
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