Ever noticed how tough economic times make us behave in certain patterns that do not seem logical at first sight?

Yup, hemlines ride up and all the way down, indicating boom and bust cycles, as was noticed in the 1920s and then the 1960s.  Some even believe that fashions can be used as a predictor of economic cycles, though I am not sure I agree with the logic in the linked article. They say that people feel more insecure in tough times and tend to dress more demurely. Less flashy = less cash, kind of logic.  While I understand the thinking behind covering up and feeling safe inside a cocoon of clothing as a response to insecure economic times, I do not see how it represents less cash flashed. I have seen some really expensive long dresses, and some really expensive short ones. I do not see the point here.

A Wharton economist called George Taylor even created a hemline index in the 1920s to correlate the Dow Jones Index with hemlines. I do not know whether he started off trying to demonstrate nonsense correlation. This is when stuff unrelated to each other shows high correlation levels, though completely meaningless. A good example of this would be the sun rising everyday and my doing my paperwork. The correlation would be a perfect negative, one always happens (thats the sun!) and the other never does. But the there is no relationship between these two. Anyway, Taylor discovered that the stock index was correlated to hemlines, and this has been proven time and again in the 20th century. I would be interested to hear of (serious) work done on establishing causality here. Does it only work one way? Can I and the sisterhood raise my hemline and ward off the bad times? Should kilts be the order of the day?

At the same time, using hemlines to predict economic cycles is a fascinating art. Unfortunately, while it tells us what is goong to happen, it does not tell us when it is going to happen. Not very useful for stock-picking then.

But there are things that we tend to consume more of in tough economic times. According to a New York Times article, we tend to prefer slow songs, laxatives and beans (any correlation between beans and laxatives?). Chocolates, dry goods, candy, beer and pasta sauce are supposed to be pretty recession proof. Stock pickers, anyone?

Hard economic times have been better for health in the Western economies. Apparently, Britain was at its healthiest after the war and rationing years. Butter, cheese and meat were rationed, people had to eat limited quantities of food. Everybody had to work harder, including physical work – involuntary physical exercise led to fitter bodies. This time round we do not have rationing, but higher food prices have led many of us to cut back on our consumption. This may be a good time to, like me, make some healthy economic decisions.


(c) meetasengupta


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s