Thursday, May 1, 2008

Lipstick Theory

Proposed by Leonard Lauder, the chairman of Estée Lauder Companies.

After the terrorist attacks of 2001 deflated the economy, Mr. Lauder noticed that his company was selling more lipstick than usual. He hypothesized that lipstick purchases are a way to gauge the economy. When it’s shaky, he said, sales increase as women boost their mood with inexpensive lipstick purchases instead of $500 slingbacks.

Beauty brands remain true believers in the theory, even though in the last few years the lipstick market has fallen on hard times as its glistening cousin, lip gloss, has had robust sales.

Three sorts of products sell robustly during tough times, said Lou Crandall, the chief economist at Wrightson ICAP, an independent research firm.

The first is what economists call traditional inferior goods, what people have to buy when they can no longer afford their favorites. If you’re a salmon lover eating tuna casserole, you’re chewing on inferior goods.

Lipsticks aren’t inferior goods, economists say, but they could be small indulgences, an inexpensive treat meant to substitute for a bigger-ticket item. Or lipsticks could also be morale boosters, like Charlie Chaplin films were during the Depression. A warm shade that perfectly matches your skin tone might make you forget how far your 401(k) has tanked.

So why don't we use lipstick sales to measure economy? “ABC News samples consumer confidence every week,” Mr. Crandall said. “We don’t have lipstick sales on a weekly basis. This is because they are more granular. The smaller the economic data becomes, the more volatile it tends to be, and the harder it is to extract the underlying signal.”

2 comments:

Anonymous said...

Hello !.
You re, I guess , probably very interested to know how one can manage to receive high yields .
There is no initial capital needed You may begin to receive yields with as small sum of money as 20-100 dollars.

AimTrust is what you need
The firm incorporates an offshore structure with advanced asset management technologies in production and delivery of pipes for oil and gas.

Its head office is in Panama with affiliates around the world.
Do you want to become a happy investor?
That`s your choice That`s what you desire!

I feel good, I started to get income with the help of this company,
and I invite you to do the same. If it gets down to choose a proper companion who uses your money in a right way - that`s it!.
I make 2G daily, and my first investment was 500 dollars only!
It`s easy to get involved , just click this link http://isygobug.arcadepages.com/yjovuh.html
and go! Let`s take our chance together to feel the smell of real money

Anonymous said...

Hi there!
I would like to burn a theme at here. There is such a nicey, called HYIP, or High Yield Investment Program. It reminds of ponzy-like structure, but in rare cases one may happen to meet a company that really pays up to 2% daily not on invested money, but from real profits.

For quite a long time, I earn money with the help of these programs.
I'm with no money problems now, but there are heights that must be conquered . I make 2G daily, and I started with funny 500 bucks.
Right now, I'm very close at catching at last a guaranteed variant to make a sharp rise . Turn to my blog to get additional info.

http://theinvestblog.com [url=http://theinvestblog.com]Online Investment Blog[/url]