The Stripper Index

Decoding The Relationship between Consumer Behaviour & Economic Trends (informal but interesting)

I recently stumbled upon this interesting concept: The Stripper Index which is an informal economic indicator, often discussed humorously, which relates to the performance of the economy and the frequency of exotic dancers or strip clubs being hired or frequented. The basic idea behind the stripper index is that during times of economic prosperity, people might spend more on luxury or non-essential services, including entertainment like strip clubs. Conversely, during economic downturns, spending on such services might decrease.

As an organisational and performance psychologist, I find it intriguing how consumer behaviour can predict economic trends. What truly captured my attention is the validity and reliability of these unconventional predictors. The Stripper Index, for instance, offers a unique lens through which we can understand economic dynamics, highlighting the intricate link between human behaviour and broader economic patterns.

This fascination stems from a blend of creative and design thinking, where unconventional indicators like The Stripper Index push us to think outside traditional economic models. They challenge us to explore the subtle, often overlooked aspects of consumer behaviour that can provide early signals of economic shifts. These indicators are not just numbers; they are stories of how people prioritise and allocate their resources in varying economic climates.

Delving into such indices, I was inspired to uncover more of these quirky, yet insightful predictors. Each one offers a fresh perspective, contributing to a richer, more nuanced understanding of economic health. From the Lipstick Index to the Men's Underwear Index, these predictors collectively paint a vibrant picture of economic sentiment and consumer confidence.

In my quest to discover more, I realised the power of integrating these unconventional indicators into mainstream analysis. They offer a creative approach to economic forecasting, blending psychology with economics. This journey not only broadens our analytical toolkit but also deepens our appreciation for the complexity of human behaviour and its impact on the economy.

The Stripper Index became a rabbit hole that led me to these other notable indices:

1. Lipstick Index: Coined by Leonard Lauder of Estée Lauder during the early 2000s recession, the Lipstick Index suggests that during economic downturns, consumers will buy more affordable luxury items, like lipstick, as a substitute for more expensive items like dresses or shoes. This is used as an indicator of consumer confidence.
2. Hemline Index: This theory, proposed by economist George Taylor in the 1920s, suggests that women's skirt lengths are a predictor of economic conditions. According to the theory, shorter skirts are worn more when the economy is doing well, and longer skirts are popular during downturns.
3. Men's Underwear Index: This index suggests that men's underwear sales are a predictor of economic conditions. The theory, humorously supported by former Fed Chairman Alan Greenspan, is that men view underwear as a necessity but will delay purchasing new underwear during tough economic times, making it a lagging indicator of economic health.
4. Big Mac Index: Created by The Economist in 1986, this index uses the price of a Big Mac in different countries to gauge the purchasing power parity (PPP) between currencies. It's a lighthearted means of measuring whether currencies are at their "correct" level based on what they can buy locally.
5. Cardboard Box Index: This index monitors the production of cardboard boxes, which is closely tied to the production and shipping of consumer goods. An increase in box production typically indicates a rise in consumer demand and possibly economic growth.
6. Dry Cleaning Index: The idea here is that during good economic times, more people are employed and need dry cleaning services for their work clothes, while during recessions, the demand for such services falls. This index tracks the volume of business at dry cleaners as a barometer of employment levels and economic vitality.
7. Tie Width Index: Some suggest that tie width and general men's fashion styles correlate with economic conditions. Wider ties are said to appear in boom times, while narrower ties coincide with more conservative, recessionary periods.

Have you come across other indices that are unconventional predictors of economic performance? The more I studied these, the more I realised that each culture would have its own unique plethora of indices. And the best way to study these, would be to crowdsource them.

Please leave your thoughts or comment on other notable indices.