Can men's underpants indicate economic health?

http://www.bbc.co.uk/news/business-20975333

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By Kevin Core You and Yours, Radio 4

The most powerful economist in the US once said the health of an economy was reflected in men's underpants sales.

Alan Greenspan, now the former chairman of the Federal Reserve, believed they were an indicator of disposable income.

Journalist Robert Krulwich, who originally learned of Mr Greenspan's theory 20 years ago, told BBC Radio 4's <a href="http://www.bbc.co.uk/programmes/b006qps9" >You and Yours</a> that the idea was still attracting interest from economists.

But the fashion for low slung jeans may have changed men's buying habits.

'Common sense'

Mr Krulwich said he was talking to Mr Greenspan in the economist's office when he began to describe the predictive power of men's underwear when it came to the economy.

"He mentioned that the sales of men's underwear are predictive of what's about to happen in the economy," the journalist said.

"He thought that if you watched the sales of that undergarment, common sense would tell you that it should stay the same - once a person achieved adulthood they would buy the underpants, wear the underpants and then buy another pair and it would probably not vary all that much.

"But he noticed there were certain variations. He then made the discovery that at a point when the underpants begin to sell a little bit less that tells you that the male of the household is likely to be protecting spending.

"He is basically trying to not spend on the one garment which truly does not matter because it is only seen by other guys in the locker room who would not care or by a wife who also would not care because it is private."

Mr Krulwich said Mr Greenspan was using a 1970s model in which the man would often give money to other members of the family - maintaining spending on his partner's and his children's clothes, but not his own.

He said economists still discussed the theory. In 2009, the ailing US economy seemed to be reflected in a drop in men's underwear sales of 2.3%. However, Mr Krulwich explained that the theory might now only be applicable if young men were taken out of the equation.

"Since then, men's underwear has gone through a kind of fashion change," he said.

"In the hip hop era people would wear their pants low exhibiting their six pack and the brand of underwear they were wearing, so Calvin Klein was a name you let other people see - at which point all bets were off."

Online changes

Jane Garner is the founder of Dead Good Undies, which employs five people in Shropshire.

"When men are buying for themselves it is their disposable income and they will wear their pants until they fall apart," she said.

Ms Garner said her recent sales did reflect recent years' fluctuations in and out of recession.

In 2011, 54,000 underpants were sold by the business, and this fell to 50,000 in 2012, which she viewed as an achievement in difficult trading circumstances.

"I don't think [the theory] works the same way these days," she added.

"The men who are buying online are controlling their own budgets and their own choices.

"When men are buying underwear it is not one of their priorities unless they are seriously into fashion. If they are investing more in underwear, they are using their disposable income and spending it. I think it is going to be a better year than 2012."