An indicator based on the theory that a consumer turns to less-expensive indulgences, such as lipstick, when she (or he) feels less than confident about the future. Therefore, lipstick sales tend to increase during times of economic uncertainty or a recession.
This term was coined by Leonard Lauder (chairman of Estee Lauder), who consistently found that during tough economic times, his lipstick sales went up. Believe it or not, the indicator has been quite a reliable signal of consumer attitudes over the years. For example, in the months following the Sept 11 terrorist attacks, lipstick sales doubled.
If this is too much for you to handle, check out the Skirt Length Theory