The Lipstick Index and Other Products that Thrive During Recessions

^{Image courtesy of emma.buckley via Flickr}

In an article for the New York Times, blogger Michelle Mismas theorizes that the economy is partially responsible for some recent nail polish trends. She cites the lipstick index, which describes the phenomenon of lipstick sales rising as economic health declines.

The theory behind the lipstick index is that during periods of poor economic health people pay for small luxuries where they would normally invest in costlier ways to satisfy the same desire. If Jane Consumer wants to get dolled up for a night out, she's more inclined to turn to lipstick--a relatively cheap beautification product--than an expensive dress. Hence, lipstick sales increase, while sales of cocktail dresses decline.

Here are six other products and services that tend to enjoy a surge in sales during tough economic times.

1. Vitamins and Supplements

The herbal supplement market grew steadily during 2008 and 2009, and it continues to exhibit growth. Analysts theorize that rising health care costs are a contributing factor--vitamins are typically cheaper, if less effective than FDA-approved prescription medicines.

2. Movie Tickets

Despite their ever-increasing prices, movie ticket sales have surged during the recession. On the whole, Americans seem to feel that a night at the movies is an affordable (enough) form of entertainment that they don't want to give up. Plus, if there were a way to quantify a desire for general escapism, I'm sure we'd see roughly a zillion percent growth rate during recessions. It may surprise you to learn that I am not an economist.

3. Spam

Although Internet spam has in fact thrived during the recession, I'm referring to the canned meat product this time. Spam has enjoyed a surge in sales since the onset of the 2000s recession. That adds up:  It's a cheap and tolerable-tasting source of protein. And so history teaches us that these factors are enough to override our modern associations of the word "spam" with junk e-mail and SEO gaming.

4. Tobacco

Smokeless tobacco and cigarette sales have remained strong throughout the recession. This may sound counter-intuitive, given the continually rising price of cigarettes. However, "sin stock" has historically enjoyed a spike during times of economic turbulence. Analysts generally see this trend as a consumer response to stressful economic conditions. Alcohol and cigarettes are a cheaper thrill than the weekend getaway a person may have taken in more prosperous times.

5. Candy

Similarly but more innocuously, candy sales have seen a significant boost during the recession. Candy, perhaps the cheapest comfort food available, is a prime example of a small pleasure in the face of tough times. And in case you were wondering, this is candy mostly sold to adults--so we can't blame sweet-toothed children for this one.

6. Video Games

Experts can't seem to agree whether the video game industry is truly recession-proof. Video games sold exceptionally well in 2008, the year that marked the onset of the recession. Video game sales then hit a four-year low in May 2011. Does this data signify an inverse relationship with economic growth--an indication of a potentially "recession-proof" industry--or does it mean that video games fail the recession-proof test? It's probably too soon to tell.

What products or services get priority when you tighten your budget? Let me know in the comments.