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04/09/2019 Skirt Length Theory
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04/09/2019 Skirt Length Theory
First suggested in 1925 by George Taylor of the Wharton School of Business, the Hemline
Index proposes that skirt hemlines are higher when the economy is performing better. For
instance, short skirts were in vogue in the 1990’s when the tech bubble was increasing.
KEY TAKEAWAYS
The skirt length theory proposes that skirt hemlines are higher when the economy
is performing better, and longer during downturns.
To its merit, the hemline indicator was accurate in 1987, when designers switched
from miniskirts to floor-length skirts just before the market crashed. A similar
change also took place in 1929,
Very few, however, trust the validity of the theory as an accurate predictor of
markets and it is considered market lore.
Skirt length theory is a fun theory to talk about, but it would be impractical and
dangerous to invest according to it.
This pattern seemingly repeated in the 1980s when mini-skirts were popularized along
with the millionaire boom that accompanied Reaganomics. The pendulum of fashion
swung back to longer skirts in the late 80s, roughly coinciding with the stock market crash
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04/09/2019 Skirt Length Theory
of 1987. However, the timing of these incidents, let alone the strength of the potential
correlation, is questionable. Although there may be a defendable thesis around periods of
sustained economic growth leading to bolder fashion choices, it is not a practical
investment thesis to work with. Even benchmarking skirt length in North American would
be a challenging undertaking. The time spent auditing clothing outlets to establish the
length of top selling skirts would take more time than it is worth considering that it is far
from proven as to whether the hemline indicator is leading or lagging.
Some other Unconventional Economic Indicators that have been promoted include:
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