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Lipstick Effect In Romania: Propensity To Buy Cosmetics And Stock Market Evolutions

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  • Aurora Murgea

Abstract

Usually, consumer spending declines during recession. Cosmetics seem to disobey this rule; there are evidences to prove that women spending on beauty products increased during the economic turmoil. The scarcity of detailed data regarding this industry makes very hard to test this effect. The present paper tries to overcome the problem, proposing an alternative methodology to analyze if the propensity to buy beauty products, especially lipstick, increased during the last economic crisis. More exactly, we use the normalized number of individuals searching from Romania the world “ruj†(lipstick) on Google as a proxy of aggregate weekly propensity to buy these products and we investigate if BET evolutions (as a proxy for the financial turmoil) are inversely correlated with it. The results drawn from the empirical analysis show the presence of such an inverse correlation on the Romanian market. The decision to buy cosmetics and especially lipstick (a product that instantly change the person imagine and could serve as a rapid mood enhancer) seems to be driven by psychological factors and less by rational ones.

Suggested Citation

  • Aurora Murgea, 2012. "Lipstick Effect In Romania: Propensity To Buy Cosmetics And Stock Market Evolutions," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 2(14), pages 1-19.
    • Handle: RePEc:alu:journl:v:2:y:2012:i:14:p:19
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    File URL: http://oeconomica.uab.ro/upload/lucrari/1420122/19.pdf
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    References listed on IDEAS

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    1. Leonardo Becchetti & Giancarlo Marini & Aurora Murgea, 2012. "The Spread Nightmare: Financial Crises and Happiness," CEIS Research Paper 252, Tor Vergata University, CEIS, revised 18 Sep 2012.
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    Cited by:

    1. Mihai Mutascu & Aurora Murgea, 2017. "Globalization and financial performances in French cosmetic industry," Working Papers halshs-01504099, HAL.

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      More about this item

      Keywords

      beauty products; recession; lipstick effect; mood;
      All these keywords.

      JEL classification:

      • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
      • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
      • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets

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