Lipstick index

The lipstick index (English Lipstick index ) was coined as a term for a kind of an economic indicator by the former CEO Leonard Lauder of the American cosmetics group Estée Lauder Companies .

Lauder coined the term at the time of the recession following the events of September 11, 2001 . The lipstick index is intended to serve as a "soft" index, complementary to the official indicators. Official indicators are based on economic evaluation and data analysis. The lipstick index, on the other hand, is based on the observation of lipstick sales. Like the official indicators, the index is intended to mark and forecast business cycles .

Lauder claimed that lipstick sales, representing sales for cosmetics as a whole, could serve as an index of purchasing power and reflect general consumer sentiment. Lauder interpreted the increased sales of “lipsticks” as a substitute ( inferior goods ) for the purchase of much more expensive products such as fashion, jewelry and shoes, since customers would significantly adjust their buying behavior in a recessive period. The validity of Lauder's assumption was doubted, for example, because he only used the sales of the Group's own products and brands as a basis for comparison. Critics also pointed out that, for example, the recession since 2008 has not had the impact on cosmetics sales as Lauder's hypothesis should have.

Web links

• Report in the online edition of the Kölner Stadtanzeiger from March 5, 2009 "Lipstick as a Crisis Indicator" (accessed on January 29, 2014)
• Cheryl Lu-Lien Tan: Lunchtime Snap. The Shaky Lipstick Index - Sales go Down, not Up, as Economy Falters. In: The Wall Street Journal , October 17, 2008.
• The lipstick index. Lip service - What lipstick sales tell you about the economy. In: The Economist , January 23, 2009.