Dublin Core
Title
The Lipstick Effect
Description
The tendency for spending on cosmetics and other small luxuries to increase during times of economic hardship.
This phenomenon is brought to life when one recalls the used jalopy dealership inter-chapter of "Grapes of Wrath." While the Lipstick Effect might seem entirely nonsensical from a wider economic perspective, it seems much more plausible to imagine one of the women buying a run-down jalopy with sawdust in the gas tank taking comfort in the one brand new and quality-controlled item they could afford: a tube of lipstick to be kept in the pocket of a dusty dress.
This phenomenon is brought to life when one recalls the used jalopy dealership inter-chapter of "Grapes of Wrath." While the Lipstick Effect might seem entirely nonsensical from a wider economic perspective, it seems much more plausible to imagine one of the women buying a run-down jalopy with sawdust in the gas tank taking comfort in the one brand new and quality-controlled item they could afford: a tube of lipstick to be kept in the pocket of a dusty dress.
Source
http://www.theguardian.com/business/2008/dec/22/recession-cosmetics-lipstick
Publisher
The Guardian
Date
Published December 21, 2008
Text Item Type Metadata
Text
"Some say hemlines and heels rise and fall with the state of the stockmarket. But for those who really want to know how bad things are there is only one item that counts: lipstick.
When times are tough, consumers stop spending on big ticket items. Car sales are down by a third; the drop in demand for mortgages has taken its toll of spending on carpets and furniture.
But, according to one City economist, rather than lose the spending habit consumers simply trade down to cheaper items to cheer themselves up. What's more, this effect has held good in recessions of the past and in countries with different cultural traditions.
The "lipstick effect" can be traced back to the Great Depression of the 1930s. In the four years from 1929 to 1933, industrial production in the US halved, but sales of cosmetics rose."
When times are tough, consumers stop spending on big ticket items. Car sales are down by a third; the drop in demand for mortgages has taken its toll of spending on carpets and furniture.
But, according to one City economist, rather than lose the spending habit consumers simply trade down to cheaper items to cheer themselves up. What's more, this effect has held good in recessions of the past and in countries with different cultural traditions.
The "lipstick effect" can be traced back to the Great Depression of the 1930s. In the four years from 1929 to 1933, industrial production in the US halved, but sales of cosmetics rose."
Original Format
Article by Larry Elliott in The Guardian.