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Is Plastic Surgery A Luxury Good?
An economic analysis of income elasticity of demand for commonly performed plastic surgery procedures

BACKGROUND: 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. “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.
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, minimally-invasive 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. 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.
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.

Table 1. Change in Median Household Income in the United States
Median Household Income, 2000*	42,587
Median Household Income, 2008**	50,863
Percent Change in Income, 2000 to 2008	19.43
*2000 figures adjusted for 3.4% inflation
**2008 figures adjusted for 3.8% inflation
***Median household income as of March of the following year, listed in 2008 Consumer Price Index (CPI) adjusted U.S. dollars

Table 2. Income Elasticity of Demand for Fifteen Commonly Performed Plastic Surgery Procedures in the United States
	Number of procedures, 2000	Number of procedures, 2008	Percent change in procedures, 2000 to 2008	Income Elasticity of Demand*****
Cosmetic Surgical Procedures	1901049	1669026	-12	-0.62
Augmentation mammaplasty***	212500	307230	45	2.32
Blepharoplasty	327514	221398	-32	-1.65
Liposuction	354015	245138	-31	-1.6
Rhinoplasty	389155	279218	-28	-1.44
Abdominoplasty	62713	121653	94	4.84
Cosmetic Minimally-Invasive Procedures	5500446	10424595	90	4.63
Botox®**	786911	5014446	537	27.6
Chemical peel	1149457	1048577	-9	-0.46
Laser hair removal	735996	891712	21	1.08
Microdermabrasion	868315	841733	-3	-19.4
Hyaluronic acid****	*	1109373	*	*
Reconstructive Procedures	*	4949191	*	*
Breast reduction	84780	88732	5	0.26
Hand surgery	*	100354	*	*
Laceration repair	358666	307485	-14	-0.72
Scar revision	221858	162803	-27	-1.39
Tumor removal	*	3769503	*	*
*Data unavailable
**Botox numbers are of anatomic sites injected
***53% of total 2008 breast implants were saline; 47% were silicone
****Hyaluronic acid includes Hylaform®, Hylaform Plus®, Restylane®, Juvederm™, Perlane®, Captique®
*****Income elasticity of demand = percent change in procedures, 2000 to 2008 / percent change in real income, 2000 to 2008

Table 3. Elasticity Categorization of Plastic Surgery Procedures
Categorization	Procedure	Income Elasticity
Luxury Goods	Botox®**	27.6
(elasticity >1)	Abdominoplasty	4.84
	Cosmetic Minimally-Invasive Procedures	4.63
	Augmentation mammaplasty***	2.32
	Laser hair removal	1.08
Necessities	Breast reduction	0.26
(elasticity >0)	Chemical peel	-0.46
	Cosmetic Surgical Procedures	-0.62
	Laceration repair	-0.72
Inferior Goods	Scar revision	-1.39
(elasticity <0)	Rhinoplasty	-1.44
	Liposuction	-1.6
	Blepharoplasty	-1.65
	Microdermabrasion	-19.4
Uncategorized	Hyaluronic acid****	*
	Hand surgery	*
	Tumor removal	*
	Reconstructive Procedures	*