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Follow Up: More Female Economic Indicators…

September 26th, 2009 · 12 Comments
Econ 101 · Follow Ups · Macroeconomics

Last week I addressed the question of whether there were female-centered economic indicators as opposed to just things like men’s underwear and hot waitresses. Today I found another one. According to The Chosun Ilbo (I totally get the random source award here. HT to EconomicMayhem), hair dye is also a countercyclical economic indicator:

Dyed hair is making a comeback. L’Oreal, the world’s no.1 hair dye manufacturer, saw the sales of its hair color products surge some 30 percent in September compared to a year earlier. The sales of unusual dye including red, copper and metallic colors soared 47 percent.

Experts make connections between the trend and the recession. A beauty specialist said people seek to escape reality in a recession, and dyed hair offers a kind of fantasy image. During the 1997-98 Asian financial crisis, dyed hair was also fashionable.

More middle-aged people also dye their hair in an effort, experts say, to look younger and stand a better chance in the depressed job market.

It is a global phenomenon. The U.K. Telegraph called the phenomenon a “gold rush” and quoted celebrity hairdresser Andrew Barton as saying that many people are dyeing their hair blond to find an antidote to the depression. In the U.S., the term “hair dye index” was newly coined to show the link between the economy and dyeing hair. People’s hair color becomes lighter as economy worsens.

(Notice that “countercyclical indicator” can be thought of as a rough synonym for “inferior good”, since the first refers to goods whose sales go up when the economy goes down and the latter refers to goods whose demand goes up when incomes decrease.) I would have thought that hair dye would be procyclical since it requires fairly frequent upkeep. As astute and presumably female reader Julia commented on the hair length indicator post:

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.

I have a strange suspicion that this behavior is going to lead to some unfortunate visible roots situations. Hopefully it doesn’t get as bad as what Drew Barrymore’s got going on here:

Yikes.

Tags: Econ 101 · Follow Ups · Macroeconomics

12 responses so far ↓

  • 1 Tony // Sep 26, 2009 at 8:46 pm

    I’m not sure if the data preclude this idea, but one reason for the skyrocketing sales in dyes is that when a recession comes, people tend to try to save money by doing things themselves.

    For example, some women who usually get their hair dyed at the salon might forgo a trip to the salon, and try the self-dye solution.

    If L’Oreal sells a greater proportion of “at home kits” than salon-style products, it makes sense that their sales (in particular) have gone up in rough economic times.

    Just a thought.

  • 2 econgirl // Sep 26, 2009 at 9:11 pm

    So I confirmed that L’Oreal does in fact sell both at home kits and salon products, though I can’t seem to find the ratio of the sales of these items. In order for sales to go up overall, either at home kits have to be more expensive (per use) than the bulk salon product or the ratio of added home sales to the lost salon sales has to be greater than 1. Granted, that ratio could be higher than 1 either because more people have started coloring their hair or because the L’Oreal home kits are replacing non-L’Oreal salon color in at least some cases.

    The fact that sales are up 30 percent leads me to believe that it’s not a pure shift from salon to home, since 30 is a big number and I don’t see any articles about salons going out of business en masse. Also, the shift wouldn’t explain the spike in what the article is calling unusual choices of color, since how often do people go to the salon to get metallic hair? (I fully admit that I don’t know exactly what this means, but the article is calling the colors unusual, so I’m just going with it.)

  • 3 econgirl // Sep 26, 2009 at 9:13 pm

    Hehe, excellent comment, courtesy of my Facebook wall:

    Haha, it’s big biz right now to talk about economic indicators. Wait… is that an economic indicator? The number of people talking about weird shit is inversely proportional to how well the economy is doing?

  • 4 Scott // Sep 27, 2009 at 12:22 pm

    Of course, Terri Nunn of the 1980′s band Berlin has been sporting Drew Barrymore’s latest ‘do’ for decades. This could be an indicator that Ms. Nunn is a stable economy all her own.

    http://www.blogcdn.com/www.stylelist.com/blog/media/2009/09/terri-nunn-drew-barrymore-425tp091109.jpg

  • 5 Bitter // Sep 27, 2009 at 6:17 pm

    I suspect that much of the shift is to at home jobs though. When I needed to cut back, dying my hair myself was the easiest change to make. I could go to a salon and get dye plus highlights from a pro for ~$300 (mall salon, not high end), eventually stop doing highlights and go to a mid-level stylist at the same salon for ~$120 (lots of hair), or buy 2-3 packages of home dye ~$30. Those aren’t savings to sneeze at.

  • 6 Burge // Sep 27, 2009 at 6:43 pm

    Don’t forget that in our current job market older people, men and women, are trying to pass as looking younger after being laid off… Which might be unique to this recession since people lost so much of their 401ks and have decided to hold off on retirement… Maybe you’ll see some trends with average age of worker and amount of hair dye sold

  • 7 Etl World News | Assorted links // Sep 27, 2009 at 7:50 pm

    [...] 4. Hair dye as a countercyclical indicator. [...]

  • 8 Ajay // Sep 28, 2009 at 12:51 pm

    Halloween’s coming.

    New school year’s beginning.

    And people feeling slightly more flush than last September, or deserving of some fun during the recession gloom and doom, go for it.

  • 9 econgirl // Sep 28, 2009 at 9:24 pm

    Here are some more weird indicators, for your reading pleasure:

    http://finance.yahoo.com/banking-budgeting/article/107795/uncommonly-clever-economic-indicators.html

  • 10 Ana // Sep 29, 2009 at 1:43 pm

    Couldn’t it be because women cannot spend in other luxury items (shoes, bags, etc) so they try to make out for that loss by dying their hair (changing their appearance) more often? Cheaper and gets the same “satisfaction” feeling (unless, of course, you pick the wrong colour).

  • 11 Carter // Oct 15, 2009 at 5:30 pm

    Lip Stick sales go up in a recession: http://www.wordspy.com/words/lipstickeffect.asp My conclusion is that many women are forced into skank-hood during a recession and the desire to get men’s money increases. This theory was confirmed when I found the correlating male indicator which shows birth control sales going up: http://www.washingtoncitypaper.com/blogs/sexist/2009/03/31/birth-control-thrives-during-recession/ For further proof of what I have coined the skank-money-grab scheme I found this gem: http://www.divorcesaloon.com/the-great-divorce-recession-of-2009

  • 12 Kad // Sep 28, 2010 at 4:58 am

    I was searching about this issue everywhere,I was really curious about this…Really big thanks.I will always looking for your new articles.Farewell, Richard

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