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How’s the Economy? Check Your Underwear

by Richard Warren on September 21, 2009 · 6 comments

  

underweareconomyThere are a multitude of economic indicators to use as a barometer of the economy. Many are extremely complex, while others are fairly simple. One of the more unusual ones actually seems to make a lot of sense. Look at your underwear drawer!

I was recently reading an article in the Washington Post (article) and assumed that it must have been a slow news day. The reporter was talking about how consumer confidence can be gauged by the underwear you keep. It seems that there is even a Men’s Underwear Index (MUI), and former Federal Reserve Chairman Alan Greenspan sees it as a credible means of tracking consumer sentiment.

Replenishment Item

The theory behind the index is that men will replace their underwear as it wears out. However, when times are tough they will wait longer than usual before purchasing a replacement. So when money is tight the sales of boxers and briefs are in the toilet. When people feel better about the economy again you will see the sales rise.

 When you think about it, it makes total sense. It’s a theory that can be applied to other items as well. Watch the sales of anything that is semi-discretionary and you will likely find that it mirrors the state of the economy.

Look for Signs

There are certain things that people have to buy regardless of how the economy is doing. We all need to eat, our cars need gas, people have to have shelter. It’s the little things that show the true state of things. Are people buying regular coffee instead of the fancy latte? Are they buying store brands instead the national names? Shopping at discount outlets instead of major department stores?

 While this may seem obvious, the change happens gradually. By tracking such an index, such as the MUI, you can spot these changes before they are obvious to all. It can help you stay ahead of the curve in the investment game rather than just being a follower.

So look in that underwear drawer, are your briefs full of holes? If so, the economy probably is too!

I don’t believe in the after life, although I am bringing a change of underwear. – Woody Allen

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{ 6 comments… read them below or add one }

Neuromarketing September 21, 2009 at 5:22 am

Interesting point… and probably true. (Though I suppose the same might be said of many “nonessential” purchases.)

Now all we need is to get the underwear makers to publish their combined sales data for an “Undie Index of Consumer Sentiment.”

Roger
.-= Neuromarketing´s last blog ..Digital Forces Brand Authenticity =-.

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Joshua Dorkin September 21, 2009 at 8:15 am

Does it matter if we’re talking about boxers or briefs? ;)

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Melanie Serra September 21, 2009 at 11:26 pm

I thoroughly enjoyed reading a post that took a very current, often depressing, issue and addressed it with a lighter tone. The idea that there is a Men’s Underwear Index (MUI) not only merits a little bit of laughter, but it also encourages outside-of-the-box-thinking. Most times when you tune in to CNN, open the Wall Street Journal, or receive insight from the government the current economic situation is described by specific, Census Bureau indicators. However, your point about men’s underwear gives a new perspective on the detriment this country is experiencing. I fell that it is particularly important to educate the younger generation of the severity of this financial downfall, and although you did not address this issue in your post, I believe something like the MUI, or similar barometers, could be utilized to illustrate, in more relatable terms, the reasons behind and economic indications of what our country is experiencing. Just imagine teaching children how to monitor the economy by looking at numbers that show them the trends of underwear sales over the past year. Yes, it is still encompasses financial jargon, but “dumbing down” the indicators, so to speak, could potentially help younger generations not only comprehend the economy, but also prepare for their future lives as adults who manage their own finances. Another author posted a similar idea with regards to the baseball card industry. He proposes that the baseball card industry can help explain the economy as we know it. All it is comprised of is combinations of infinite individual decisions made on a daily basis, anyway—so the baseball card idea is just another way to become financially savvy. I am curious to know your opinion on the matter of educating younger generations using theories such as the one you discussed in your post. Is it plausible to use such theories as a means of education for younger children? Is it the government and social institution’s responsibility to do so? In any event, never before have been so interested in men, underwear and purchasing patterns that correlate the two—so thank you for your insightful and entertaining post.

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VS September 22, 2009 at 11:53 am

In London one measure they use is how easy it is to get a taxi(cab), the more the City is booming the fewer taxis there are available – and vice-versa. This is may be a more useful way to judge for yourself rather than checking the state of other people’s underwear…..

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Melissa September 29, 2009 at 8:31 pm

Melanie, I think that is a great idea about using things more interesting, such as baseball cards and underwear to educate children about the financial aspects of the economy. While it may not be a government responsibility, many (most) parents are not well educated enough in the area of economics to provide their children with the information they will need to be financially responsible citizens in the future.

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Taxi Pete November 11, 2009 at 3:03 pm

@VS so true, we run a taxi dispatch service and basically are able to track GDP or other parameters with our internal booking metric. So Plenty of Taxi = Bad Economy rings true to me. Don’t know about the briefs though…

Pete

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