Heard of the Big Mac index? It’s a theory that a consumable item, available globally can see used as a constant, comparable unit to understand economic trends, currency, cost of living etc.
The Lipstick Index was also devised as an economic indicator to understand consumer behaviour, and index “affordable luxury”. It was based one the premise that during times of recession or economic hardship, women can’t necessarily afford a new dress or other consumer goods, but they will purchase a new lipstick.
In this week’s episode of The Knitrepreneurs, we discuss how the Lipstick Index relates to our yarn craft industry. In Australia, mortgages have increased significantly, cost of electricity and other essential items are going up, and the cost of living is expected to continue to rise into the new year. How might this affect the purchasing power of knitters and crocheters? And how could we respond to this challenging market using what we know about the Lipstick Index?