The lipstick effect is the theory that when facing an

economic crisis An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with the p ...

consumers will be more willing to buy less costly

luxury goods In economics, a luxury good (or upmarket good) is a good for which demand increases more than what is proportional as income rises, so that expenditures on the good become a greater proportion of overall spending. Luxury goods are in contrast to n ...

. Instead of buying expensive purses and fur coats, for example, people will buy expensive cosmetics, such as high-end brands of

lipstick Lipstick is a cosmetic product used to apply coloration and texture to lips, often made of wax and oil. Different pigments are used to produce color, and minerals such as silica may be used to provide texture. The use of lipstick dates back to ...

. The underlying assumption is that a certain portion of consumers will still buy luxury goods even during a bad economy. When consumer trust in the economy is dwindling, consumers will buy goods that have less impact on their available funds. Outside the cosmetics market, consumers might be tempted to purchase other high-end goods such as expensive beers, or smaller, less costly electronic gadgets. It has been rumored that lipstick sales doubled after the

9/11 attacks The September 11 attacks, commonly known as 9/11, were four coordinated Suicide attack, suicide List of terrorist incidents, terrorist attacks carried out by al-Qaeda against the United States on Tuesday, September 11, 2001. That morning, ...

on the United States; however, other sources say this is an overstatement. In a ''

New York Times ''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid d ...

'' article published May 1, 2008,

Leonard Lauder Leonard Alan Lauder (born March 19, 1933) is an American billionaire, philanthropist, art collector. He and his brother, Ronald Lauder, are the sole heirs to the Estée Lauder Companies cosmetics fortune, founded by their parents, Estée Laud ...

is quoted as saying that he noted his company's sales of lipstick rose after the terrorist attacks, he did not claim they doubled. Juliet Shor in her book ''The Over Spent American'' talks to consumer's purchase of higher-priced, more prestigious lipsticks, specifically

Chanel Chanel ( , ) is a French high-end luxury fashion house founded in 1910 by Coco Chanel in Paris. Chanel specializes in women's ready-to-wear, luxury goods, and accessories and licenses its name and branding to Luxottica for eyewear. Chanel is ...

, that are used in public, vs. lower-priced, less prestigious brands that are used in the privacy of the bathroom. ''

The Economist ''The Economist'' is a British weekly newspaper printed in demitab format and published digitally. It focuses on current affairs, international business, politics, technology, and culture. Based in London, the newspaper is owned by The Econo ...

'' tested the lipstick effect in 2009 with statistical analysis, stating that "reliable historical figures on lipstick sales are hard to find, and most lipstick believers can only point to isolated, anecdotal examples as evidence of the larger phenomenon. Data collected by Kline & Company, a market-research group, show that lipstick sales sometimes increase during times of economic distress, but have also been known to grow during periods of prosperity. In other words, there is no clear correlation."{{Cite magazine, url=https://www.economist.com/node/12995765, title=Lip reading, magazine=

, date=January 22, 2009 , language=en, access-date=2018-04-30

References

Economics effects Cosmetics Lipstick