Behind the bald figures Receding hairlines and other signals of where the economy is heading

A FEW weeks ago The Economist invited readers who enjoy our Big Mac index to help invent other quirky economic indicators. We received many suggestions for different products with which to calculate exchange rates at purchasing-power parity, ranging from Coca-Cola and bottled water to mobile-phone charges and taxi fares. But given recent financial jolts, we were more interested in ideas that might help to show where the economy is heading.

Many readers already have their pet indicator—sometimes literally. A vet claims that his business leads the economic cycle by as much as six months, because when times get tough pet owners are quick to cut back on vaccinations and non-essential surgery, such as neutering; they also delay getting a new dog. A reader from the pharmaceutical industry recommends tracking suppositories. “Financial worries and austerity changes in diet cause intestinal disorders,” he says, and sales of suppositories therefore rise as the economy goes down the pan.

More down-to-earth readers tipped packaging materials, such as wooden pallets, cartons and plastic stretch-wrap, as useful leading indicators. The snag with all these ideas is that the data are not widely and quickly available. That is why many readers favour anecdotal gauges, such as the ease of getting a taxi or finding a parking space.

Since the 1920s rising and falling hemlines have been a time-honoured gauge of confidence, but one reader suggests taking a close look at leaders’ hairlines as a measure of how much stress they and their economy are suffering. The balding pate of George Papandreou, Greece’s prime minister, is a sell sign, and Silvio Berlusconi’s hair transplant cannot hide Italy’s troubles. When hairlines recede, runs the thin theory, economies are likely to follow.

But the hottest tip came from Edward Ritchie, an investment analyst in London. He tracks Google searches for the “gold price” as an indicator of economic confidence. This does not follow the gold price itself. For example, during most of 2008 when the world’s financial system was melting down, the gold price tumbled yet the number of searches soared. The number of gold-price searches shoots up when American consumer confidence dives and subsides when households perk up again. That makes it a handy device for spotting turning-points in economic confidence, with the added advantage that the data are available earlier than for conventional survey-based figures. Worryingly, the number of searches has recently vaulted above its 2008 peak, signalling the possibility of a double dip.

The Economist, August 27th 2011

NOTES

Big Mac index - индекс "Биг Мак" - способ приблизительной проверки корректности уровня валютного курса, основанный на теории абсолютного паритета покупательной способности; при расчете индекса вместо стоимости обычной потребительской корзины используется цена сандвича "Биг Мак" в разных странах; напр., если Биг Мак стоит 2,75 евро в странах, которые используют эту валюту, и $2,65 в США, тогда курс доллара к евро должен быть равен 2,75/2,65 = 1,0377; индекс ежемесячно публикуется журналом The Economist с 1986 г.