Economists Do It With Models

Warning: “graphic” content…

Bookmark and Share
Follow Up: A Lesson On Economic Indicators (And Yeah, I Went There)…

April 12th, 2009 · 9 Comments
Follow Ups · Macroeconomics

Two points:

1. I wrote earlier about how (and why) the most recent government stimulus checks were a boon to the porn industry.

2. Sam Stein recently reported on The Huffington Post about one of Alan Greenspan’s most popular wacky economic indicators: men’s underwear. The article states, among other things:

“As chairman of the Federal Reserve, Alan Greenspan was known for using quirky, proletariat metrics to judge the temperature of the economy. The most famous of these, as recounted by NPR’s Robert Krulwich in January 2008, were the sales of men’s underwear. If the economic scales dipped even the slightest, Greenspan reasoned, it was as sure a sign as any that people were truly feeling the pinch.

‘If you look at sales of male underpants it’s just pretty much a flat line, it hardly ever changes,’ Krulwich recounted after the publishing of Greenspan’s book, ‘The Age Of Turbulence.’ ‘But on those few occasions where it dips that means that men are so pinched that they are deciding not to replace underpants. And [Greenspan] said “that is almost always a prescient, forward impression that here comes trouble.”‘”

Hm. So let’s see…when the economy gets bad, stimulus checks go out, which leads to an increase in porn consumption. If the economy is really bad (or people think it is going to get really bad), less men’s underwear is purchased, though thankfully not a lot less. I’ve summarized this in a nice little diagram:

I don’t even want to think about the logistics of this.

Tags: Follow Ups · Macroeconomics

9 responses so far ↓

  • 1 The PULSE Review // Apr 12, 2009 at 7:26 pm

    I usually buy more underwear when I’m too lazy to do laundry, and I happen to be at Target. I think for most guys, that’s the most compelling reason, so you should add that to the calculations.

  • 2 Moonshine Joey // Apr 12, 2009 at 7:27 pm

    Please…most dudes never buy their own underwear. They are purchased by mothers or girlfriends. But when there’s an economic slump, dudes loose their girlfriends because they cannot afford to take ’em out to eat and whatnot. And girls usually buy their man specialty underwear that looks good in dim light.

    A more focused representation of a possible economic slump would be Calvin Klein boxer briefs…’cause mama’s gunna buy me draz rain or shine…economically speaking.

    Porn is porn is porn. If dudes don’t have money to buy porn, they’ll just use the old stuff. This I don’t disagree with.

  • 3 Heaven // Apr 13, 2009 at 2:53 pm

    I remember learning, in one of my sociology of deviance classes, that men who feel the least empowered tend the use pornography the most. I’d imagine that the environment that we’re in combined with the temporary influx of discretionary income is what sends male consumers to the girly mags.

  • 4 GeekTeacherMom // Apr 15, 2009 at 7:00 am

    Funny your chart is almost exactly what I taught in my economics class for undergrads last year! I’m driving them all to your site!

  • 5 Unormal // Apr 16, 2009 at 12:58 pm

    Look, total underwear sales isn’t corrected for population; what we REALLY need is a total-replacement-rate for the national male underwear fleet.

  • 6 Lynn // Apr 16, 2009 at 10:20 pm

    awesome blog.

    I thought up of a new equation when trying to recall what MPM stood for (it’s been a while, I’m more of a macro/banking econ geek). I think it’d fit in nicely: Marginal Propensity to Masturbate. The change in frequency to masturbate over the change in the price of porn.

    I wonder if it has anything to do with underwear in a recession.

  • 7 coco // Apr 17, 2009 at 11:14 pm

    And what about women bras uhm…the slump on the sales of bras has a 95% correlation to men increasing acquisition of pornfilms.

  • 8 GeekTeacherMom // Apr 18, 2009 at 3:02 pm

    Coco-guess Greenspan did not contemplate bras….

  • 9 econgirl // Jun 9, 2009 at 3:04 pm

    Hee…Greg Mankiw is totally behind the times. Today, on his blog:

    “From MSN Money:

    former Federal Reserve chief Alan Greenspan is a fan of men’s underwear sales as an important economic indicator.”

    http://gregmankiw.blogspot.com/2009/06/fact-of-day.html

Leave a Comment