A few weeks ago TheEconomist invited readers who enjoy our Big Mac index to help invent otherquirky economic indicators. We received many suggestions for different productswith which to calculate exchange rates at purchasing-power parity, ranging fromCoca-Cola and bottled water to mobile-phone charges and taxi fares. But givenrecent financial jolts, we were more interested in ideas that might help toshow where the economy is heading.
Many readers already have their pet indicator - something literally. A vetclaims 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 vaccinationsand non-essential surgery, such as neutering；they also delay getting anew dog. A reader from the pharmaceutical industry recommends trackingsuppositories. ゛Financial worries and austerity changes indiet cause intestinal disorders,゛he says, and sales ofsuppositories therefore rise as the economy goes down the pan.
Another reader suggests that stress also reduce libido, so a fall in condomsales may signal recession, whereas a rise could point to a virile recovery.More down-to-earth readers tipped packaging materials, such as wooden pallets,cartons and plastic stretch-wrap, as useful leading indicators. The snag withall these ideas is that the data are not widely and quickly available. That iswhy many readers favour anecdotal gauges, such as the ease of getting a taxi orfinding a parking space.
Since the 1920s rising and falling hemlines have been a time-honoured gauge ofconfidence, but one reader suggests taking a close look at leaders' hairlinesas a measure of how much stress they and their economy are suffering. Thebalding pate of George Papandreou, Greece's prime minister, is a selling, andSilvio Berlusconi's hair transplant cannot hide Italy's troubles. Whenhairlines 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 notfollow the gold price itself. For example, during most of 2008 when the world'sfinancial system was melting down, the gold price tumbled yet the number ofsearches soared. The number of gold-price searches shoot up when Americanconsumer confidence dives and subsides when households perk up again. Thatmakes it a handy device for spotting turning-points in economic confidence,with the added advantage that the data are available earlier than forconventional survey-based figures. Worryingly, the number of searches hasrecently vaulted above its 2008 peak, signalling the possiblility of a doubledip.
