Many know more or less about the lipstick index, or the hemline index that both indicate certain relationship between economics and female fashion trends. Has anyone ever wondered what men’s fashion have to do with the economics? The Men’s Underwear Index tells you everything about the hidden ties between the sales of men’s underwear and current economic conditions.

The revenue generated by men’s underwear usually stays stable because they are regarded as daily necessity instead of luxury items. However, when the economy faces a downturn, men’s underwear industry is likely to suffer from a “prolonged purchase”, according to Marshal Cohen, because male tend not to purchase new pairs of underwear until the economy gets better. As a result, men’s underwear industry is likely to witness a decrease in sales when economy is bad.

On the other hand, however, since men’s underwear companies have discovered the underlying connection between the Men’s Underwear Index (MUI) and the economics, they start to utilize predictions for men’s underwear sales as an indicator for economy conditions as a whole. In the early 2000s, men start to explore a world where their choices of underwear are no longer limited to basic black and white boxers, since companies started to make colorful and modern designs underwear with high-tech materials. These advancements signify a growing economy, which is reflected by increasing sales numbers during the time. Had the economy been growing at a stable rate, the estimated sales of men’s underwear would look like this:

However, as time approaches the year of 2008, the relatively stable men’s underwear industry has observed a phenomenon, which men are increasingly willing to purchase single pairs of underwear instead of multi-packs of underwear. During the recession, men’s underwear sales dropped by 2.3 percent; and it is not until in 2010 when sales began to slowly climb up again. This transition represents the change of men’s habits during times when smooth economic growth is challenged: they tend to purchase underwear only when they absolutely need to. Of course, there are men who still purchase underwear regular basis during times when economy is slowing down; but what the MUI indicates is a big picture from which people can tell the economic conditions according to increase/decrease in men’s underwear sales numbers.

Overall, the Men’s Underwear Index can be regarded as a reliable economic indicator, thanks to its stable sales behavior throughout the years. When an economic downturn arrives, men are less likely to shop for underwear on a frequent basis, therefore extending the purchasing cycle and lowering sales in the long run.

http://www.huffingtonpost.com/2012/10/09/underwear-sales-growth-economy_n_1952214.html

http://www.washingtonpost.com/wp-dyn/content/article/2009/08/30/AR2009083002761.html?hpid=topnews

http://www.businessinsider.com/mens-underwear-index-economy-indicator-2014-9

Alligator

After reading dozens of lists of strange economic indicators, ranging from things like unclaimed corpses to baby diaper rashes, I settled on researching more about the Alligator Population Index. Believe it or not, generally when there are more alligators in the world, the economy usually is not doing so well.

The reason? Well think about it. Alligator skin is typically used to make high priced luxury goods like handbags, shoes, belts and more. Basically anything that comes in leather comes in alligator skin, except it is usually around triple the price. These items are sold in stores like Neiman Marcus, Bergdorf Goodman, Saks Fifth Avenue, and Bloomingdales. They’re produced by brands like Gucci, Hermes, Manolo Blahnik and Jimmy Choo.

And who buys these goods? Generally it is the people who have the most money to spend. The trend starts from there. If the rich are not dropping $25,000 on an alligator skin handbag, then Gucci is not buying alligator skin from the tanneries, and then the tanneries are not buying the alligators from the farmers.

So the rich are watching their funds by not buying luxury goods. Then Gucci cuts back by not buying the skins at all. Then the tanneries have no reason to buy from the farmers. And the farmers lose A LOT of money.

A New York Times article from 2009 tells the story of Tommy Fletcher, a Floridian man who was forced to shut down his alligator farming business after 5 years. In 2008, Louisiana farmers gathered over 500,000 alligator eggs fro the wild. But in 2009, for the first time in a very long time, most farmers collected none.

The article names the economy as the “lead culprit.” It discusses how “even wealthy customers began balking at the price of alligator skin products, which can range from the expensive to the wildly expensive.” Once considered a bumper crop, there was now a large surplus in the alligator skin market. Alligator farming is a business that cannot sustain itself on even a shaky economy. It is an expensive business from top to bottom. It’s expensive to buy the eggs, raise the gators, buy the skin, produce the product, and then buying the finished product.

Since that large 2009 dip in alligator products, it has since shown signs of bouncing back, with the reopening of a few farms, and the re-production of products by the high-end brands.