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The lipstick effect is the theory that during an economic crisis, consumers will be MORE willing to buy LESS costly LUXURY goods.
For example, Instead of buying expensive luxury handbags, consumers will buy lipstick.
One underlying assumption for this is that consumers will buy luxury goods even if there is a crisis. When consumer trust in the economy is declining, consumers will buy goods that have less impact on their available funds.
Outside the cosmetics market, consumers could be tempted by expensive beer or smaller, less costly gadgets.