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NESPS 27th Annual Meeting Abstracts

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Is Plastic Surgery A Luxury Good? An Economic Analysis of Income Elasticity of Demand for Commonly Performed Plastic Surgery Procedures
Lara L. Devgan, M.D., M.P.H., Robert T. Grant, M.D., M.Sc..
New York-Presbyterian Hospital, the University Hospital of Columbia and Cornell, New York, NY, USA.

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 200819.43
*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, 2000Number of procedures, 2008Percent change in procedures, 2000 to 2008Income Elasticity of Demand*****
Cosmetic Surgical Procedures19010491669026-12-0.62
Augmentation mammaplasty***212500307230452.32
Blepharoplasty327514221398-32-1.65
Liposuction354015245138-31-1.6
Rhinoplasty389155279218-28-1.44
Abdominoplasty62713121653944.84
Cosmetic Minimally-Invasive Procedures550044610424595904.63
Botox®**786911501444653727.6
Chemical peel11494571048577-9-0.46
Laser hair removal735996891712211.08
Microdermabrasion868315841733-3-19.4
Hyaluronic acid*****1109373**
Reconstructive Procedures*4949191**
Breast reduction847808873250.26
Hand surgery*100354**
Laceration repair358666307485-14-0.72
Scar revision221858162803-27-1.39
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
CategorizationProcedureIncome Elasticity
Luxury GoodsBotox®**27.6
(elasticity >1)Abdominoplasty4.84
Cosmetic Minimally-Invasive Procedures4.63
Augmentation mammaplasty***2.32
Laser hair removal1.08
NecessitiesBreast reduction0.26
(elasticity >0)Chemical peel-0.46
Cosmetic Surgical Procedures-0.62
Laceration repair-0.72
Inferior GoodsScar revision-1.39
(elasticity <0)Rhinoplasty-1.44
Liposuction-1.6
Blepharoplasty-1.65
Microdermabrasion-19.4
UncategorizedHyaluronic acid*****
Hand surgery*
Tumor removal*
Reconstructive Procedures*


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