Has anyone ever heard the term “lipstick effect” or perhaps “lipstick indicator?” It’s an economic phenomenon where women will spend more on cosmetics, most notably lipstick, during recessions, but a U Mass economist has trashed a recent attempt at an explanation, asserting its not only sexist but also hogwash.
The proposed lipstick effect
There is an economic phenomenon called the “lipstick effect,” also known as the “lipstick indicator” and the “lipstick index.” The term was coined by Leonard Lauder of Estee Lauder, the cosmetics company, according to The Economist. Lauder noted lipstick sales during the recession of the early 2000s went up while most other consumer products went the other way. It was also observed in other periods; research showed lipstick sales were up 25 percent in the Great Depression.
One theory goes that during an economic downturn, women will spend a few extra dollars on lipstick as it’s relatively cheap. It doesn’t just apply to lipstick; according to Jezebel.com, the same effect has been noted for nail polish, foundation makeup and cinema attendance. The idea is that people will be willing to spend a bit more money on little luxuries to perk themselves up in a depressing time.
However, according to ABC, an economist from the University of Massachusetts, Boston, took to the airwaves to slam a recently-released paper by researchers from five universities titled “Boosting Beauty in an Economic Decline: Mating, Spending and the Lipstick Effect.” The paper appeared in the “Journal of Personality and Social Psychology, ” and offered an explanation of why women might spend more on lipstick during a recession.
The study showed the non-control group fictitious news stories about perpetually bad economic conditions and quizzed the subjects, 82 women and 72 men, all undergraduate students, about whether they thought the supposed recession meant fewer attractive people with good employment were in the dating pool. Then they asked how willing they would be to buy certain items.
Correlation, causality and economist rubbishes conclusions
The study found women in the non-control group were more apt to spend on “appearance enhancing” items, including lipstick and form-fitting clothing, with the idea being women are more apt to spend money to make themselves even more attractive to a potential mate, as the more desirable ones are scarcer in lean times. Dr. Julie Nelson, the economics chair at University of Massachusetts, Boston, takes umbrage with the study only looking at one age cohort, namely young women that are looking for a partner.
The study also doesn’t prove that was the only incentive for a willingness to spend on such items. In other words, there might be at least one explanation why a subsection of a portion of gender might spend money on lipstick during a recession. Not only that, but the study also suggests women are more likely to spend money on altering their appearance to attract a mate, whereas men aren’t willing to do so.
Correlation does not necessarily prove causality. As The Economist points out, the lipstick effect doesn’t necessarily prove that lipstick sales have anything to do with recessions, as cosmetic sales rise during “boom” cycles as well as “bust” cycles of recession.