Sarah Hill, psychology professor, explains that while most industries are affected by economic downturns, the cosmetic industry is not one of them. This phenomenon has been named the "lipstick effect." Hill discusses why people spend more money on a class of non-essential goods when they have less disposable income.
While economic recessions lead to decreased spending, what are some reasons downturns might increase spending on certain products?
Research reveals that recessionary cues--whether naturally occurring or experimentally primed--decreased desire for most products. These cues, however, consistently increased women's desire for products that increase attractiveness to mates. Additional studies show that this effect is driven by women's desire to attract mates with resources and depends on the perceived mate attraction function served by these products. In addition to showing how and why economic recessions influence women's desire for beauty products, this research provides novel insights into women's mating psychology, consumer behavior, and the relationship between the two.
Have there been any specific examples of this historically, and what products were involved?
This phenomenon can be traced back to the Great Depression of the 1930s. In the four years from 1929 to 1933, industrial production in the United States halved, but sales of cosmetics rose. More recently, employment in the U.S. cosmetics sector went up in the recessions of 1990 and 2001 while jobs in the rest of manufacturing were being shed.
What are the psychological reasons behind this spending behavior?
Women’s psychologies may have been shaped to respond to economic resource scarcity by allocating more effort into securing a financially secure mate in an environment where such mates are scarce. During periods of scarcity, women see a decrease of the availability of quality mates. Because unemployment and low returns on investments occur at a higher rate during recessions, a recession may signal to women that financially secure men are becoming relatively scarce.
The lipstick effect may factor into shopping this holiday season. Cash-strapped consumers want to reward themselves with something that helps them to forget their financial problems. People may not be able to afford a ski-trip in Aspen, but they can still manage a new bottle of Chanel perfume.
Learn more about TCU’s Department of Psychology.