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Men's Underwear Index

By Raunaq Jain

Throughout the history of mankind, people have been caught with their pants down (so to speak) on various occasions by shits in the economy,some structural whereas some cyclical. Little did they know that underneath the said pants was one of the more unconventional metrics that tracked the relative health of the economy. The Men's Underwear Index, which was made popular by Alan Greenspan, former Fed Chairman in the 1970's.

The Men's Underwear Index operates under the assumption that the retail sales of the men's underwear are stable because they are considered to be a necessity and not a luxury. However, during times of crisis, men will try to stretch the time between buying new pairs, causing the sales to drop.

On an average men buy 3.4 pairs of underwear per year (Source: Business Insider) but during times of crisis this began to fall. During the GFC there was a 2% decline in men buying single pairs, showing that they may only be replacing pais of underwear when it was an absolute necessity. Even if we look at the retail sales during the GFC, we see a slump in total retail sales of underwear in the years leading to the crisis, and we observe a similar trend in sales performance of Hanes, a well known undergarment company.

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