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

Listed author(s):
  • Aurora Murgea

    (West University of Timisoara Romania)

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

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Article provided by Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia in its journal Annales Universitatis Apulensis Series Oeconomica.

Volume (Year): 2 (2012)
Issue (Month): 14 ()
Pages: 1-19

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Handle: RePEc:alu:journl:v:2:y:2012:i:14:p:19
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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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