Is Plastic Surgery A Luxury Good?
An economic analysis of income elasticity of
demand for commonly performed plastic surgery
procedures
Lara L. Devgan, MD,MPH, Robert T. Grant, MD,MSc
Division of Plastic Surgery
New York-Presbyterian Hospital/ Columbia
University & Weill Cornell Medical Centers
New York, NY
Nothing to disclose
Objective

The popular press has widely speculated
that America’s slowed economic growth
affects the demand for plastic surgery. In
this paper, we calculate the “income
elasticity of demand” of fifteen commonly
performed procedures in plastic surgery,
as an indicator of how rising or declining
purchasing power skews their popularity.
Background


“Income elasticity of demand” is an economic
term used to measure the responsiveness of the
quantity demanded of a particular good to
changes in income of the people demanding it.
Although this metric has been well-described for
consumer goods, its role in surgical procedures
has not been elucidated, and the effect of the
economy on plastic surgery remains poorly
understood.
Materials and Methods



Using data from the American Society of Plastic
Surgeons’ “National Clearinghouse of Plastic Surgery
Statistics,” we determined the percent change between
2000 and 2008 for each of the five most commonly
performed cosmetic surgical procedures, minimallyinvasive cosmetic procedures, and reconstructive
surgical procedures.
In order to calculate the corresponding change in
aggregate domestic income during this time period, we
used United States Census Bureau inflation-adjusted
real income data for 2000 and 2008, as a per capita
proxy.
Statistical analysis was performed using STATA 9.0.
Results


Consumer real wages increased by 19.43%
between 2000 and 2008, while cosmetic surgery
decreased by 12%, cosmetic minimally-invasive
procedures increased by 90%, and
reconstructive surgery remained relatively
constant.
As such, the income elasticity of demand for
cosmetic surgery is -0.62, while for cosmetic
minimally-invasive procedures it is 4.63. It could
not be calculated for reconstructive procedures
due to unavailable data.
Change in U.S. Median
Household Income
Median household
42,587
income, 2000, adjusted
for 3.4% inflation
Median household
50,863
income, 2008, adjusted
for 3.8% inflation
Percent change in
19.43
income, 2000 to 2008
Results, continued

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Botox, abdominoplasty, augmentation mammaplasty,
and laser hair removal are considered luxury goods
(elasticities >1): they are demanded more frequently as
consumers become richer.
Breast reduction, chemical peel, and laceration repair
(elasticities ~0) are inelastic goods, or necessities:
demand is relatively constant regardless of income
change.
Scar revision, rhinoplasty, liposuction, blepharoplasty,
and microdermabrasion (elasticities <0) are inferior
goods: as purchasing power increases, consumers are
less likely to undertake them, perhaps substituting them
with more luxury procedures.
Luxury Goods
Elasticity > 1
Botox
Abdominoplasty
Augmentation
mammaplasty
Laser hair removal
27.6
4.84
2.32
1.08
Economic Necessities
Elasticity > 0
Breast reduction
Chemical peel
Laceration repair
0.26
-0.46
-0.72
Inferior Goods
Elasticity < 0
Scar revision
Rhinoplasty
Liposuction
Blepharoplasty
Microdermabrasion
-1.39
-1.44
-1.6
-1.65
-19.4
Conclusions

Responding to changes in economic
climate is vital in tailoring the practice of
plastic and reconstructive surgery. Use of
standard economic indicators like income
elasticity can help elucidate the effect of
falling purchasing power, a widespread
consequence of our current recession.