The Lipstick Effect is the idea that lipstick is close to a Giffen Good. That is, something whose demand rises when the price does. A very odd idea but one that we know does happen, usually with the base carbohydrate in a diet.
As we all know – OK, everyone not insane like a socialist or a planner – as the price of something rises demand for it falls. Except, what if we’re talking about a society close to the subsistence level and we’re talking about the base food? That basic foodstuff rises in price so people might – might! – have to economise on the other, better, foods they used to have in order to be able to buy enough of that base food to still survive. So, the price of stodge rises, people buy more stodge.
This has actually been observed with respect to rice in south China and wheat noodles in north China. That it affects the basic stodges in the different areas is one of the proofs that this is a real thing happening. We sorta assume that this will be true of tortillas in central America, mealie meal in sub-Saharan Africa and so on.
Close to, akin but not the same is the lipstick effect:
The reliability of women always wanting to wear make-up prompted Leonard Lauder, chairman of Estée Lauder, to coin the term “lipstick effect” in 2001 after noticing that lipstick sales were inversely correlated to economic health — people bought lipstick as an affordable luxury to feel and look better when facing an uncertain world. The Covid-19 recession might be the first to not see the same effect.
Lipstick hasn’t gone up in price so it isn’t he same, exactly, but it’s clearly a related phenomenon. But, it’s not happening now.
“There is still a lipstick effect in the way consumers turn to cosmetics for a little pick-me-up , but it has shifted to skincare and bath and body,” said Ms Gerstell, the author of a McKinsey report on the beauty industry.
Perhaps we might be able to help people here. Even, to make the odd prediction about what is happening. Around here we’d argue that eye make up sales will be soaring, lipstick falling.
You know, people are wearing masks?