Philip Hans Franses’ research refutes fashion predictions about recession

Recently, the theory about fashion trends as economic predictors received renewed attention by tech strategist Madé Lapuerta of JPMorgan. Through her popular social media account ‘Data, But Make It Fashion’, she pointed to a sudden increase in the popularity of maxi skirts and lipstick in the US, trends that she believes indicate an approaching recession. Her analysis coincided with a decline in the S&P 500 and uncertainty about President Donald Trump’s trade policy.

The hemline index, an idea from 1926, states that the length of skirts is related to the economic cycle: shorter skirts in good times, longer skirts in bad times. A similar line of thought underlies the lipstick index, devised by Leonard Lauder in 2001, which states that women are more likely to buy lipstick as a small luxury item during economic downturns.

‘Urban legend’

Professor Philip Hans Franses, who together with Marjolein Baardwijk conducted an in-depth analysis of almost a century of fashion data from L’Officiel in 2010, is clear: ‘The hemline index is an urban legend.’ According to Franses, there may be moments when fashion and the economy seem to move simultaneously, but there is a lack of structural regularity and causality.

Lapuerta’s analysis was criticised and labeled as sexist. She refutes this and states that her research emphasises the importance of female-dominated sectors. She also pointed out a similar trend in men’s fashion, such as a decline in sales of men’s underwear during economic downturns.

Although fashion trends can sometimes provide interesting insights into consumer behavior, science remains skeptical about their predictive value for economic developments.