Economists Do It With Models

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Reader Question: Why No Female Economic Indicators? And Introducing The PUMA Index…

September 17th, 2009 · 6 Comments
Just For Fun · Macroeconomics · Reader Questions

You may remember that I have posted a few times about wacky economic indicators, most notably Alan Greenspan’s use of men’s underwear sales as a proxy for the health of the economy.

From reader Matt: “Funny, both these and the hot waitress example seem to be relevant more for men, and our country is a slight majority of females, right? Any funny indicators to reflect them?”

Given the gender ratio in the economics profession, it doesn’t really surprise me that a lot of these indicators are appealing to men in various ways. But, to be fair, I will point out a few that are more towards the female side of things:

  • The Skirt Length Indicator: There is a theory that shorter skirts are an indicator of market gains and vice versa. The rationale is that shorter skirts appear when consumer confidence and excitement is high. (Okay, fine, maybe that one is still male-oriented.)
  • The Hair Length Indicator: From the article:

    “The length of women’s hair can be a strong indicator of consumer confidence,” says Ernest Biktimirov, an associate professor of finance at Brock University in St. Catharine’s, Ont.

    “When there’s uncertainty about the economy, women realize they can’t spend as much time on their hair, or as much money on (hair) products, and as a result tend to go for shorter styles.”

    Apparently, there is also empirical evidence over the last two decades in Japan that lends support to this hypothesis.

  • The Lipstick Index: There is a theory that lipstick sales go up in hard times, as consumers switch away from more extravagant purchases but still want to maintain some notion of luxury. (It’s a lot less expensive to feel pampered with a $20 lipstick than a $500 pair of shoes.) In economic terms, this would mean that lipstick is a countercyclical asset in a sense. This theory has been met with mixed evidence on an empirical level, but the rationale is certainly appealing.

The hair article even says the following:

Biktimirov, an expert on index effect, says women tend to be the focus of economic barometers — which have historically used everything from lipstick sales to skirt lengths to gauge the markets — because they’re more sensitive to fiscal change.

Well, there you have it- at first I was going to say that my initial sample of indicators might have been unrepresentative, but I suppose it’s only fair to note that it’s possible to have a female-focused index that is still geared towards males. (see Hot Waitress Index, for example.)

Now enter the PUMA Index. From AppShopper:

The PUMA Index is a global stock ticker with a twist. When the market goes down, our models’ clothes come off – right down to their PUMA Bodywear. So if you lose your shirt, at least they do, too.

Choose a male or female model to be your guide to the DOW index. Shake to switch between genders. The market numbers will be updated throughout the day and when it gets bad enough, or good enough, the models will be called into action.

Haha, “if you lose your shirt, at least they do too.” Well there’s a hedging strategy if I ever heard one. I wonder if they considered making an app with the reverse relationship for the short-sellers of the world. Here’s a cute video about the index:

Yep. There’s an app for that- economists doing it with models. Given the original question, I do find it interesting that, as far as I can tell, there are three female models (to represent different exchanges, naturally) but only one male model. I’ll leave you with some screen shots, courtesy of Fast Company:

Tags: Just For Fun · Macroeconomics · Reader Questions

6 responses so far ↓

  • 1 Rob // Sep 17, 2009 at 3:56 pm

    In addition to lipstick, apparently women wear higher heels in recessions. Which doesn’t necessarily imply the same “cheap luxury” point as you mentioned above. My guess for both the lipstick and the heels, it’s more of a sexual signalling device: since eligible (i.e. employed) men are scarcer in recessions, women have to compete even harder to attract the few remaining ones.

  • 2 Julia // Sep 17, 2009 at 5:06 pm

    I’ve got to disagree on the premise of the hair length indicator. Shorter hair cuts require more frequent trips to the salon and often more styling time than longer hair. The salon trips alone must be the most expensive part of hair care.

    I suggest as an alternative a “pony tail” indicator – more pony tails in times of economic distress as pony tails require less time, less hair product, and fewer trips to the salon.

    But, in counterargument, I’ve seen articles in this recession where small indulgences have increased in lieu of larger indulgences, a massage once a month instead of a vacation. Perhaps salon trips fall into this category?

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