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In
economics Economics () is a social science Social science is the branch A branch ( or , ) or tree branch (sometimes referred to in botany Botany, also called , plant biology or phytology, is the science of plant life and a bran ...

economics
, a luxury good (or upmarket good) is a
good 125px, In many Western religions, angels are considered to be good beings and are contrasted with devils who are considered evil In most contexts, the concept of good denotes the conduct that should be preferred when posed with a choice betwee ...
for which
demand In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods ...
increases more than what is proportional as
income In microeconomics, income is the Consumption (economics), consumption and saving opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms.Smith's financial dictionary. Smith, Howard Irving. 190 ...
rises, so that expenditures on the good become a greater proportion of overall spending. Luxury goods are in contrast to
necessity good In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods an ...
s, where demand increases proportionally less than income. ''Luxury goods'' is often used synonymously with ''
superior good 300px, Seven different types of Demand for this seafood">Demand_(economics).html" ;"title="caviar. Total Demand (economics)">Demand for this seafood is a convex function of household income, making it a superior good. Superior goods or luxury goo ...
s''.


Definition

The word "luxury" originated from the
Latin Latin (, or , ) is a classical language belonging to the Italic languages, Italic branch of the Indo-European languages. Latin was originally spoken in the area around Rome, known as Latium. Through the power of the Roman Republic, it became ...

Latin
word ''luxuria'', which means exuberance, excess, abundance. A luxury good can be identified by comparing the demand for the good at one point in time against the demand for the good at a different point in time, with a different income level. When income increases, demand for luxury goods increases even more than income does. When income decreases, demand for luxury goods drops even more than income does. For example, if income rises 1%, and the demand for a product rises 2%, then the product is a luxury good. This contrasts with ''basic goods'', for which demand stays the same or decreases only slightly as income decreases.


Scope of the term

With increasing accessibility to luxury goods, new product categories have been created within the luxury market, called "accessible luxury" or "mass luxury". These are meant specifically for the
middle class The middle class is a class Class or The Class may refer to: Common uses not otherwise categorized * Class (biology), a taxonomic rank * Class (knowledge representation), a collection of individuals or objects * Class (philosophy), an an ...
, sometimes called the "aspiring class" in this context. Because luxury has now diffused into the masses, defining the word has become more difficult.


Confusion with normal goods

"Superior goods" is the gradable antonym of "
inferior goods In economics Economics () is a social science Social science is the Branches of science, branch of science devoted to the study of society, societies and the Social relation, relationships among individuals within those societies. ...
". If the quantity of an item
demand In economics Economics () is a social science Social science is the branch A branch ( or , ) or tree branch (sometimes referred to in botany Botany, also called , plant biology or phytology, is the science of plant ...

demand
ed increases with income, but not by enough to increase the share of the
budget A budget is a financial plan In general usage, a financial plan is a comprehensive evaluation of an individual's current pay and future financial state by using current known variables to predict future income, asset values and withdrawal p ...

budget
spent on it, then it is only a
normal good In economics Economics () is a social science Social science is the branch A branch ( or , ) or tree branch (sometimes referred to in botany Botany, also called , plant biology or phytology, is the science of plant ...
and is not a superior good. Consumption of all normal goods increases as income increases. For example, if income increases by 50%, then consumption will increase (maybe by only 1%, maybe by 40%, maybe by 70%). A superior good is a normal good for which the proportional consumption increase exceeds the proportional income increase. So, if income increases by 50% then consumption of a superior good will increase by more than 50% (maybe 51%, maybe 70%). In economics terminology, all goods with an
income elasticity of demand In economics, the income elasticity of demand is the responsivenesses of the quantity demanded for a good to a change in consumer income. It is measured as the ratio of the percentage change in quantity demanded to the percentage change in income ...
greater than zero are "normal", but only the subset having income elasticity of demand > 1 are "superior". Some texts on
microeconomics Microeconomics is a branch of mainstream economics Mainstream economics is the body of knowledge, theories, and models of economics, as taught by universities worldwide, that are generally accepted by economists as a basis for discussion. Als ...
use the term ''superior good'' as the sole alternative to an ''inferior good'', making "superior goods" and "normal goods" synonymous. Where this is done, a product making up an increasing share of spending under income increases is often called an ''ultra-superior good''.


Art history

Though often verging on the meaningless in modern marketing, "luxury" remains a legitimate and current technical term in for objects that are especially highly decorated to very high standards and use expensive materials. The term is especially used for
medieval In the history of Europe The history of Europe concerns itself with the discovery and collection, the study, organization and presentation and the interpretation of past events and affairs of the people of Europe since the beginning of ...

medieval
manuscript A manuscript (abbreviated MS for singular and MSS for plural) was, traditionally, any document written by hand – or, once practical typewriter A typewriter is a or machine for characters. Typically, a typewriter has an array ...

manuscript
s to distinguish between practical working books for normal use, and fully
illuminated manuscript An illuminated manuscript is a formally prepared document A document is a writing, written, drawing, drawn, presented, or memorialized representation of thought, often the manifestation of nonfiction, non-fictional, as well as fictional, con ...
s, that were often bound in
treasure binding A treasure binding or jewelled bookbinding is a luxurious book cover A book cover is any protective covering used to bind together the pages of a book A book is a medium for recording information Information can be thought of as t ...
s with metalwork and jewels. These are often much larger, with less text on each page and many illustrations, and if liturgical texts were originally usually kept on the
altar An altar is a structure upon which offerings such as sacrifice Sacrifice is the offering of material possessions or the lives of animals or humans to a deity A deity or god is a supernatural The supernatural encompasses supposed phe ...
or
sacristy A sacristy, also known as a vestry or preparation room, is a room in Christianity, Christian churches for the keeping of vestments (such as the alb and chasuble) and other church furnishings, sacred vessels, and parish records. The sacristy is us ...

sacristy
rather any library that the church or
monastery A monastery is a building or complex of buildings comprising the domestic quarters and workplaces of monastics, monk A monk (, from el, μοναχός, ''monachos'', "single, solitary" via Latin Latin (, or , ) is a classical l ...

monastery
who owned them may have had. Luxury manuscripts were commissioned by the very wealthy and differed in the same ways from cheaper books. "Luxury" may be used for other
applied arts The applied arts are all the arts that apply design A design is a plan or specification for the construction of an object or system or for the implementation of an activity or process, or the result of that plan or specification in the ...
where both utilitarian and luxury versions of the same types of objects were made. This might cover metalwork, ceramics, glass, arms and armour, and a wide range of objects. It is much less used for objects with no function beyond being an artwork: paintings, drawings and
sculpture Sculpture is the branch of the visual arts that operates in three dimensions. It is one of the plastic arts. Durable sculptural processes originally used carving (the removal of material) and modelling (the addition of material, as clay), ...

sculpture
, even though the disparity in cost between an expensive and cheap work may have been as large.


Market


Characteristics

Luxury goods have high
income elasticity of demand In economics, the income elasticity of demand is the responsivenesses of the quantity demanded for a good to a change in consumer income. It is measured as the ratio of the percentage change in quantity demanded to the percentage change in income ...
: as people become wealthier, they will buy proportionately more luxury goods. This also means, however, that should there be a decline in income, its demand will drop more than proportionately. Income elasticity of demand is not constant with respect to income, and may change sign at different levels of income. That is to say, a luxury good may become a
necessity good In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods an ...
or even an
inferior good In economics Economics () is a social science Social science is the Branches of science, branch of science devoted to the study of society, societies and the Social relation, relationships among individuals within those societies. ...

inferior good
at different income levels. Some luxury products have been claimed to be examples of
Veblen good A Veblen good is a type of luxury good In economics, a luxury good (or upmarket good) is a good (economics), good for which demand (economics), demand increases more than what is proportional as income rises, so that expenditures on the good bec ...

Veblen good
s, with a positive
price elasticity of demand A good's price elasticity of demand (E_d, PED) is a measure of how sensitive the quantity demanded is to its price. When the price rises, quantity demanded falls for almost any good, but it falls more for some than for others. The price elastici ...

price elasticity of demand
: for example, making a perfume more expensive can increase its perceived value as a luxury good to such an extent that sales can go up, rather than down. However, it is important to note that
Veblen good A Veblen good is a type of luxury good In economics, a luxury good (or upmarket good) is a good (economics), good for which demand (economics), demand increases more than what is proportional as income rises, so that expenditures on the good bec ...

Veblen good
s are not the same as luxury goods in general. Although the technical term luxury good is independent of the goods' quality, they are generally considered to be goods at the highest end of the market in terms of quality and price. Many markets have a luxury segment including, for example, luxury versions of
automobile A car (or automobile) is a wheeled motor vehicle A motor vehicle, also known as motorized vehicle or automotive vehicle, is a self-propelled vehicle, commonly wheeled, that does not operate on Track (rail transport), rails (such as trains o ...

automobile
s,
yacht A yacht is a sailing or power vessel used for pleasure, cruising, or racing. There is no standard definition, so the term applies to such vessels that have a cabin with amenities that accommodate overnight use. To be termed a , as opposed to a , ...

yacht
s,
wine Wine is an alcoholic drink An alcoholic drink is a drink A drink (or beverage) is a liquid A liquid is a nearly incompressible fluid In physics, a fluid is a substance that continually Deformation (mechanics), deforms (flow ...

wine
,
bottled water Bottled water is drinking water Drinking water, also known as potable water, is that is safe to or use for . The amount of drinking water required to maintain good health varies, and depends on physical activity level, age, health-relat ...

bottled water
,
coffee Coffee is a drink prepared from roasted s, the seeds of from certain s in the ' genus. From the coffee fruit, the seeds are separated to produce a stable, raw product: unroasted ''green coffee''. The seeds are then , a process which transfo ...

coffee
,
tea Tea is an aromatic beverage prepared by pouring hot or boiling water over cured A cure is a completely effective treatment for a disease. Cure, or similar, may also refer to: Places * Cure (river), a river in France * Cures, Sabinum, an ...

tea
,
foods Food is any substance consumed to provide nutritional Nutrition is the biochemical Biochemistry or biological chemistry, is the study of chemical processes within and relating to living organism In biology, an organism (from Anci ...

foods
,
watches A watch is a portable Clock, timepiece intended to be carried or worn by a person. It is designed to keep a consistent movement despite the motions caused by the person's activities. A wristwatch is designed to be worn around the wrist, attach ...

watches
,
clothes Clothing (also known as clothes, apparel, and attire) are items worn on the body. Typically, clothing is made of fabrics or textiles, but over time it has included garments made from animal skin and other thin sheets of materials and natural ...

clothes
,
jewelry Jewellery or jewelry consists of decorative items worn for personal adornment 150px, The principal adornment of these girls from the Bundu tribe in Sierra Leone is the adornment of bodies and faces with markings produced by the smearing on by ...

jewelry
, and
high fidelity High fidelity (often shortened to Hi-Fi or HiFi) is the high-quality reproduction of sound. It is important to audiophile An audiophile is a person who is enthusiastic about high-fidelity High fidelity (often shortened to Hi-Fi or HiFi) ...
sound equipment. Luxuries may be services. The hiring of full-time or live-in
domestic servants A domestic worker is a person who works within the scope of a residence. The term "domestic service" applies to the equivalent occupational category. In traditional English contexts, such a person was said to be "in service". Domestic workers per ...
is a luxury reflecting disparities of income. Some financial services, especially in some brokerage houses, can be considered luxury services by default because persons in lower-income brackets generally do not use them. Luxury goods often have special
luxury packaging Luxury and specialty packaging is the design, research, development, and manufacturing of packaging, displays, and for luxury brands. The packaging of a luxury product is part of the brand’s image and research shows consumers are willing to ...
to differentiate the products from mainstream competitors.


Trends

Originally, luxury goods were available only to the very wealthy and "aristocratic world of old money" that offered them a history of tradition, superior quality, along with a pampered buying experience. Luxury goods have been transformed by a shift from custom-made (
bespoke The word ''bespoke'' () has evolved from a verb meaning 'to speak for something', to its contemporary usage as an adjective. Originally, the adjective ''bespoke'' described tailor-made suits and shoes. Later, it described anything commissioned t ...
) works with exclusive distribution practices by specialized, quality-minded family-run and small businesses to a
mass production Mass production, also known as flow production or continuous production, is the production of substantial amounts of standardized Standardization or standardisation is the process of implementing and developing technical standard A techni ...
of specialty
brand A brand is a name, term, design, symbol or any other feature that identifies one seller's good or service as distinct from those of other sellers. Brands are used in business Business is the activity of making one's living or making mon ...

brand
ed goods by profit-focused large corporations and marketers. The trend in modern luxury is simply a product or service that is marketed, packaged, and sold by global corporations that are focused "on growth, visibility, brand awareness, advertising, and, above all, profits." Increasingly, luxury logos now available to all consumers at a premium price across the world including online. Global consumer companies, such as
Procter & Gamble The Procter & Gamble Company (P&G) is an American multinational consumer goods A final good or consumer good is a final product In Production (economics), production, a final product, or finished product is a product (business), product th ...
, are also attracted to the industry, due to the difficulty of making a
profit Profit may refer to: Business and law * Profit (accounting) Profit, in accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic en ...
in the mass consumer goods market. The customer base for various luxury goods continue to be more culturally diversified, and this presents more unseen challenges and new opportunities to companies in this industry. The three dominant trends in the global luxury goods market are: *
Globalization Globalization, or globalisation (Commonwealth English The use of the English language English is a of the , originally spoken by the inhabitants of . It is named after the , one of the ancient that migrated from , a peninsu ...

Globalization
* Consolidation: Consolidation involves the growth of big companies and ownership of brands across many segments of luxury products. Examples include
Kering Kering () is a French-based multinational corporation specializing in luxury goods In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distr ...
,
LVMH LVMH Moët Hennessy Louis Vuitton (), commonly known as LVMH, is a French Holding company, holding multinational corporation and conglomerate (company), conglomerate specializing in luxury goods, headquartered in Paris. The company was formed in ...
and
Richemont Compagnie Financière Richemont SA, also known as Richemont, is a Switzerland-based luxury good In economics, a luxury good (or upmarket good) is a good (economics), good for which demand (economics), demand increases more than proportionall ...

Richemont
, which dominate the market in areas ranging from luxury drinks to fashion and cosmetics. *
Diversification Diversification may refer to: Biology and agriculture * Genetic divergence, emergence of subpopulations that have accumulated independent genetic changes * Agricultural diversification involves the re-allocation of some of a farm's resources to ne ...


Size

The luxury goods market has been on an upward climb for many years. Apart from the setback caused by the
1997 Asian Financial Crisis The Asian financial crisis was a period of financial crisis that gripped much of East Asia and Southeast Asia beginning in July 1997 and raised fears of a worldwide economic meltdown due to financial contagion. The crisis started in Thailand (kno ...
, the industry has performed well, particularly in 2000. In that year, the world luxury goods market was worth close to $170 billion and grew 7.9 percent. The United States has been the largest regional market for luxury goods and is estimated to continue to be the leading personal luxury goods market in 2013, with a value of 62.5 billion euros. The largest sector in this category was luxury drinks, including premium
whisky Whisky or whiskey is a type of distilled alcoholic beverage made from fermented Fermentation is a metabolic Metabolism (, from el, μεταβολή ''metabolē'', "change") is the set of life Life is a characteristic that ...

whisky
,
champagne Champagne (, ) is a sparkling wine Sparkling wine is a wine Wine is an alcoholic drink typically made from fermented grape juice. Yeast Yeasts are eukaryotic, single-celled microorganisms classified as members of the fungus ...
, and
cognac Cognac ( , also , ) is a variety of brandy Brandy is a liquor Liquor or spirit (also hard liquor, or distilled alcohol) is an alcoholic drink produced by distillation of grains, fruits, or vegetables that have already gone through al ...
. This sector was the only one that suffered a decline in value (-0.9 percent). The watches and jewelry section showed the strongest performance, growing in value by 23.3 percent, while the clothing and accessories section grew 11.6 percent between 1996 and 2000, to $32.8 billion. The largest ten markets for luxury goods account for 83 percent of overall sales, and include Japan, China, United States, Russia, Germany, Italy, France, United Kingdom, Brazil, Spain, and Switzerland. In 2012,
China China (), officially the People's Republic of China (PRC; ), is a country in East Asia East Asia is the eastern region of Asia Asia () is Earth's largest and most populous continent, located primarily in the Eastern Hemisphere ...
surpassed
Japan Japan ( ja, 日本, or , and formally ) is an island country An island country or an island nation is a country A country is a distinct territory, territorial body or political entity. It is often referred to as the land of an in ...
as the world's largest luxury market. China's luxury consumption accounts for over 25% of the global market. According to the Global Wealth and Lifestyle Report 2020,
Hong Kong Hong Kong (; , ), officially the Hong Kong Special Administrative Region of the People's Republic of China (HKSAR), is a city A city is a large human settlement.Goodall, B. (1987) ''The Penguin Dictionary of Human Geography''. London: Pe ...

Hong Kong
,
Shanghai Shanghai (, , Standard Chinese, Standard Mandarin pronunciation: ) is one of the four Direct-administered municipalities of China, direct-administered municipalities of the China, People's Republic of China. The city is located on the sou ...

Shanghai
,
Tokyo Tokyo (Japanese language, Japanese: , ''Tōkyō'' ), historically known in the west as Tokio and officially the Tokyo Metropolis (, ''Tōkyō-to''), is capital of Japan, the capital and most populous Prefectures of Japan, prefecture of Japan ...

Tokyo
and
Singapore Singapore (), officially the Republic of Singapore, is a sovereign state, sovereign island city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, bor ...

Singapore
were four of the five most expensive cities for luxury goods in Asia. In 2014, the luxury sector was expected to grow over the following 10 years because of 440 million consumers spending a total of 880 billion euros, or $1.2 trillion.


Advertising

The advertising expenditure for the average luxury brand is 5-15% of sales
revenue In accounting Accounting or Accountancy is the measurement ' Measurement is the number, numerical quantification (science), quantification of the variable and attribute (research), attributes of an object or event, which can be used to comp ...
, or about 25% with the inclusion of other communications such as
public relations Public relations (PR) is the practice of managing and disseminating information from an individual or an organization An organization, or organisation (English in the Commonwealth of Nations, Commonwealth English; American and British ...
, events and sponsorships. A rather small group in comparison, the wealthy tend to be extremely influential. Once a brand gets an "endorsement" from members of this group, then the brand can be defined as a true "luxury" brand. An example of different product lines in the same brand is found in the automotive industry, with "entry-level" cars marketed to younger, less wealthy consumers, and higher-cost models for older and more wealthy consumers.


Economics

In Economics, superior goods or luxury goods make up a larger ''proportion'' of
consumption Consumption may refer to: *Resource consumption *Tuberculosis, an infectious disease, historically in biology: * Consumption (ecology), receipt of energy by consuming other organisms in social sciences: * Consumption (economics), the purchasing of ...
as
income In microeconomics, income is the Consumption (economics), consumption and saving opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms.Smith's financial dictionary. Smith, Howard Irving. 190 ...
rises, and therefore are a type of
normal good In economics Economics () is a social science Social science is the branch A branch ( or , ) or tree branch (sometimes referred to in botany Botany, also called , plant biology or phytology, is the science of plant ...
s in
consumer theory The theory of consumer choice is the branch of microeconomics Microeconomics is a branch of mainstream economics Mainstream economics is the body of knowledge, theories, and models of economics, as taught by universities worldwide, that ar ...
. Such a good must possess two economic characteristics: it must be scarce, and, along with that, it must have a high price.Shellfish Economics
A course outline for the FAO of the United Nations; ''Fisheries and Aquaculture Department.'' Retrieved April 18, 2008.
The scarcity of the good can be natural or artificial; however, the general population (i.e.,
consumer A consumer is a person or a group who intends to order, orders, or uses purchased goods, products, or Service (economics), services primarily for personal, social, family, household and similar needs, not directly related to entrepreneurial or bu ...
s) must recognize the good as distinguishably ''better''. Possession of such a good usually signifies "
superiority Superior may refer to: *Superior (hierarchy), something which is higher in a hierarchical structure of any kind Places *Superior (proposed U.S. state), an unsuccessful proposal for the upper peninsula of Michigan to form a separate state *Lake ...
" in resources, and usually is accompanied by prestige. A
Veblen good A Veblen good is a type of luxury good In economics, a luxury good (or upmarket good) is a good (economics), good for which demand (economics), demand increases more than what is proportional as income rises, so that expenditures on the good bec ...

Veblen good
is a superior goods with a prestige value so high that a price decline might ''lower'' demand. The
income elasticity In economics, the income elasticity of demand is the responsivenesses of the quantity demanded for a good to a change in consumer income. It is measured as the ratio of the percentage change in quantity demanded to the percentage change in income ...
of a superior good is above one by definition, because it raises the expenditure share as income rises. A superior good also may be a luxury good that is not purchased at all below a certain level of income. Examples would include
smoked salmon Smoked salmon is a preparation of salmon Salmon is the common name for several species of ray-finned fish Actinopterygii ( New Latin ('having rays') + Greek ( 'wing, fins')), members of which are known as ray-finned fishes, is a cla ...

smoked salmon
and
caviar Caviar (also known as caviare; from fa, خاویار, khâvyâr, egg-bearing) is a food consisting of salt-cured roe of the family Acipenseridae. Caviar is considered a delicacy and is eaten as a garnish or a spread. Traditionally, the term ...

caviar
, and most other
delicacies Image:4 Kobe Beef, Kobe Japan.jpg, Kobe beef A delicacy is usually a rare or expensive food item that is considered highly desirable, sophisticated or peculiarly distinctive, within a given culture. Irrespective of local preferences, such a ...
. On the other hand, superior goods may have a wide quality distribution, such as
wine Wine is an alcoholic drink An alcoholic drink is a drink A drink (or beverage) is a liquid A liquid is a nearly incompressible fluid In physics, a fluid is a substance that continually Deformation (mechanics), deforms (flow ...

wine
and
holiday A holiday is a day set aside by Norm (social), custom or by law on which normal activities, especially business or work including school, are suspended or reduced. Generally, holidays are intended to allow individuals to celebrate or commemorate ...

holiday
s; however, though the ''number'' of such goods consumed may stay constant even with rising wealth, the level of spending will go up, to secure a better experience.


Socioeconomic significance

Several manufactured products attain the status of "luxury goods" due to their design, quality, durability, or performance that are remarkably superior to the comparable substitutes. There are also goods that are perceived as luxurious by the public simply because they play a role of
status symbol A status symbol is a visible, external symbol of one's social position, an indicator of economic or social status Social status is the level of social value a person is considered to hold. More specifically, it refers to the relative level of r ...
s as such goods tend to signify the purchasing power of those who acquire them. These items, while not necessarily being better (in quality, performance, or appearance) than their less expensive substitutes, are purchased with the main purpose of displaying
wealth Wealth is the abundance of valuable financial asset A financial asset is a non-physical asset whose value is derived from a contractual claim, such as deposit (finance), bank deposits, bond (finance), bonds, and participations in companies' sh ...

wealth
or
income In microeconomics, income is the Consumption (economics), consumption and saving opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms.Smith's financial dictionary. Smith, Howard Irving. 190 ...
of their owners. These kinds of goods are the objects of a socio-economic phenomenon called ''
conspicuous consumption In sociology and in economics, the term conspicuous consumption describes and explains the consumer A consumer is a person or a group who intends to order, orders, or uses purchased goods, products, or services Service may refer to: Activitie ...
'' and commonly include
luxury vehicle A luxury car is a car A car (or automobile) is a wheeled motor vehicle Electric bicycles parked in Yangzhou's main street, Wenchang Lu. They are a very common way of transport in this city, in some areas almost outnumbering regular bicycl ...
s,
watch A watch is a portable timepiece A clock is a device used to measure, verify, keep, and indicate time Time is the indefinite continued sequence, progress of existence and event (philosophy), events that occur in an apparently irr ...

watch
es,
jewelry Jewellery or jewelry consists of decorative items worn for personal adornment 150px, The principal adornment of these girls from the Bundu tribe in Sierra Leone is the adornment of bodies and faces with markings produced by the smearing on by ...

jewelry
,
designer clothing Designer clothing is expensive luxury clothing considered to be high quality and haute couture ''Haute couture'' (; ; French for 'high sewing Sewing is the craft of fastening or attaching objects using stitches made with a sewing needle ...
,
yacht A yacht is a sailing or power vessel used for pleasure, cruising, or racing. There is no standard definition, so the term applies to such vessels that have a cabin with amenities that accommodate overnight use. To be termed a , as opposed to a , ...

yacht
s, as well as large residences, urban
mansion A mansion is a large dwelling house. The word itself derives through Old French from the Latin word ''mansio'' "dwelling", an abstract noun derived from the verb ''manere'' "to dwell". The English word ''manse'' originally defined a property la ...

mansion
s, and
country houses An English country house is a large house or mansion in the English countryside. Such houses were often owned by individuals who also owned a Townhouse (Great Britain), town house. This allowed them to spend time in the country and in the cit ...
.


Luxury brands

The idea of a luxury
brand A brand is a name, term, design, symbol or any other feature that identifies one seller's good or service as distinct from those of other sellers. Brands are used in business Business is the activity of making one's living or making mon ...

brand
is not necessarily a product or a price point, but a
mindset In decision theory Decision theory (or the theory of choice not to be confused with choice theory) is the study of an agent's choices. Decision theory can be broken into two branches: normative Normative generally means relating to an evaluat ...
where core values that are expressed by a brand are directly connected to the producer's dedication and alignment to perceptions of quality with its customers' values and aspirations. Thus, it is these target customers, not the product, that make a luxury brand. Brands that are considered luxury connect with their customers by communicating that they are the top of their class or considered the best in their field. Furthermore, these brands must deliver - in some meaningful way - measurably better performance. What consumers perceive as luxurious brands and products change over the years, but there appear to be three main drivers: (1) a high price, especially when compared to other brands within its segment; (2) limited supply, in that a brand may not need to be expensive, but it arguably should not be easily obtainable and contributing to the customers' feeling that they have something special; and (3) endorsement by celebrities, which can make a brand or particular products more appealing for consumers and thus more "luxurious" in their minds. Two additional elements of luxury brands include special packaging and personalization. These differentiating elements distance the brands from the mass market and thus provide them with a unique feeling and user experience as well as a special and memorable "luxury feel" for customers. However, the concept of a luxury brand is now so popular that it is used in almost every retail, manufacturing, and service sector. Moreover, new marketing concepts such as "mass-luxury" or "hyper luxury" further blur the definition of what is a luxury product, a luxury brand, or a luxury company. Examples include
LVMH LVMH Moët Hennessy Louis Vuitton (), commonly known as LVMH, is a French Holding company, holding multinational corporation and conglomerate (company), conglomerate specializing in luxury goods, headquartered in Paris. The company was formed in ...
, the largest luxury good producer in the world with over fifty brands (including
Louis Vuitton Louis Vuitton Malletier (), commonly known as Louis Vuitton or by its initials LV, is a French fashion house Fashion design is the Art (skill), art of applying design, aesthetics, clothing construction and natural beauty to clothing and its Fa ...

Louis Vuitton
) and sales of €42.6 billion in 2017,
Kering Kering () is a French-based multinational corporation specializing in luxury goods In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distr ...
, which made €15.9 billion in revenue for a net income of €2.3 billion in 2019, and
Richemont Compagnie Financière Richemont SA, also known as Richemont, is a Switzerland-based luxury good In economics, a luxury good (or upmarket good) is a good (economics), good for which demand (economics), demand increases more than proportionall ...

Richemont
.


Luxury department stores

Since the development of mass-market "luxury" brands in the 1800s, department stores dedicated to selling all major luxury brands have opened up in most major cities around the world. Le Bon Marché in
Paris Paris () is the Capital city, capital and List of communes in France with over 20,000 inhabitants, most populous city of France, with an estimated population of 2,175,601 residents , in an area of more than . Since the 17th century, Paris ha ...

Paris
,
France France (), officially the French Republic (french: link=no, République française), is a transcontinental country This is a list of countries located on more than one continent A continent is one of several large landmasses ...

France
is credited as one of the first of its kind. In the United States, the development of luxury-oriented department stores not only changed the retail industry, but also ushered the idea of freedom through consumerism, and a new opportunity for middle- and upper-class women.


Luxury shopping districts

Fashion brands within the luxury goods market tend to be concentrated in exclusive or affluent districts of cities around the world. These include: *
Amsterdam Amsterdam (, , ) is the Capital of the Netherlands, capital and Municipalities of the Netherlands, most populous city of the Netherlands with a population of 872,680 within the city proper, 1,558,755 in the City Region of Amsterdam, urban ar ...

Amsterdam
's P.C. Hooftstraat *
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Athens
'
Voukourestiou Street Voukourestiou Street (Greek: Οδός Βουκουρεστίου, ''Odos Voukourestiou'') named after the 1913 Treaty of Bucharest, which ended the Second Balkan War The Second Balkan War was a conflict which broke out when Kingdom of Bulgaria, ...
and
Kolonaki Kolonaki (, ), literally "Little Column", is an upscale neighborhood in central Athens , image_skyline = File:Athens Montage L.png, center, 275px, alt=Athens montage. Clicking on an image in the picture causes the browser ...
district *
Bangalore Bangalore , List of renamed Indian cities and states, officially known as Bengaluru (), is the Capital city, capital and the largest city of the Indian state of Karnataka. It has a population of more than and a metropolitan area, metropolit ...

Bangalore
's
UB City UB City is a luxury business district in Bengaluru Bangalore , officially known as Bengaluru (), is the capital Capital most commonly refers to: * Capital letter Letter case (or just case) is the distinction between the lette ...

UB City
*
Barcelona Barcelona ( , , ) is a city on the coast of northeastern Spain. It is the capital and largest city of the autonomous community of Catalonia, as well as the second most populous municipality of Spain. With a population of 1.6 million within ci ...

Barcelona
's *
Beijing Beijing ( ), as Peking ( ), is the of the . It is the world's , with over 21 million residents within an of 16,410.5 km2 (6336 sq. mi.). It is located in , and is governed as a under the direct administration of the with .Figures ...

Beijing
’s Yabaolu *
Berlin Berlin (; ) is the Capital city, capital and List of cities in Germany by population, largest city of Germany by both area and population. Its 3,769,495 inhabitants, as of 31 December 2019 makes it the List of cities in the European Union by ...

Berlin
's
Kurfürstendamm The Kurfürstendamm (; colloquially ''Ku'damm'', ) is one of the most famous avenue (landscape), avenues in Berlin. The street takes its name from the former ''Kurfürsten'' (prince-electors) of Margraviate of Brandenburg, Brandenburg. The broad, ...

Kurfürstendamm
*
Bogotá Bogotá (, also , , ), officially Bogotá, Distrito Capital, abbreviated Bogotá, D.C., and formerly known as Santa Fe de Bogotá during the Spanish period and between 1991 and 2000, is the Capital city, capital and largest city of Colombia, a ...

Bogotá
's Zona T *
Boston Boston (, ), officially the City of Boston, is the capital city, capital and List of municipalities in Massachusetts, most populous city of the Commonwealth (U.S. state), Commonwealth of Massachusetts in the United States and 21st List of Unit ...

Boston
's
Newbury Street Newbury Street is located in the Back Bay area of Boston Boston (, ), officially the City of Boston, is the capital city, capital and List of municipalities in Massachusetts, most populous city of the Commonwealth (U.S. state), Commonweal ...
*
Brussels Brussels (french: Bruxelles or ; nl, Brussel ), officially the Brussels-Capital Region (All text and all but one graphic show the English name as Brussels-Capital Region.) (french: link=no, Région de Bruxelles-Capitale; nl, link=no, Brusse ...

Brussels
' Louizalaan/
Avenue Louise Avenue Louise ( French) or Louizalaan ( Dutch) is a major thoroughfare in Brussels Brussels (french: Bruxelles or ; nl, Brussel ), officially the Brussels-Capital Region (All text and all but one graphic show the English name as Brussels-Ca ...
*
Buenos Aires Buenos Aires ( or ; ), officially Autonomous City of Buenos Aires, is the capital Capital most commonly refers to: * Capital letter Letter case (or just case) is the distinction between the letters that are in larger uppercase or cap ...

Buenos Aires
' *
Cartagena Cartagena or Carthagena may refer to: Places Chile *Cartagena, Chile, a commune in Valparaíso Region Colombia *Cartagena, Colombia, a city in the Bolívar Department, the largest city with this name **Roman Catholic Archdiocese of Cartagena, an ...

Cartagena
's
Bocagrande Bocagrande is a neighbourhood in the city of Cartagena de Indias in Bolívar Department, Bolívar, Colombia. It was designed with first-world standards, such as residential areas of restricted access, and a separate plant for processing waste wate ...

Bocagrande
*
Chicago (''City in a Garden''); I Will , image_map = , map_caption = Interactive map of Chicago , coordinates = , coordinates_footnotes = , subdivision_type = Country , subdivision_name ...

Chicago
's Oak Street *
Düsseldorf Düsseldorf ( , , ; often in English sources; Low Franconian Low Franconian, Low Frankish, NetherlandicSarah Grey Thomason, Terrence Kaufman: ''Language Contact, Creolization, and Genetic Linguistics'', University of California Press, 199 ...

Düsseldorf
's
Königsallee The Königsallee (; literally "''King's Avenue''") is an urban boulevard A boulevard ( French, originally meaning bastion, abbreviated as bd in Metropolitan French, boul in Canadian French, and Blvd in English), is a type of large road, ci ...
*
Florence Florence ( ; it, Firenze ) is a city in Central-Northern Italy Italy ( it, Italia ), officially the Italian Republic ( it, Repubblica Italiana, links=no ), is a country consisting of Italian Peninsula, a peninsula delimited by the Al ...

Florence
's
Via de' Tornabuoni Via de' Tornabuoni, or Via Tornabuoni, is a street at the center of Florence Florence ( ; it, Firenze ) is a city in Central Italy and the capital city of the Tuscany Regions of Italy, region. It is the most populated city in Tuscany, with 3 ...
*
Frankfurt Frankfurt, officially Frankfurt am Main (; Hessian dialects, Hessian: , "Franks, Frank ford (crossing), ford on the Main (river), Main"; french: Francfort-sur-le-Main), is the most populous city in the States of Germany, German state of Hess ...

Frankfurt
's Freßgass * Hamburg's Neuer Wall *
Hong Kong Hong Kong (; , ), officially the Hong Kong Special Administrative Region of the People's Republic of China (HKSAR), is a city A city is a large human settlement.Goodall, B. (1987) ''The Penguin Dictionary of Human Geography''. London: Pe ...

Hong Kong
's Central, Hong Kong, Central, Tsim Sha Tsui * Istanbul's Abdi İpekçi Street and İstinye Park * Jakarta's Menteng and Kebayoran Baru * Johannesburg's Sandton (Nelson Mandela Square) * Kuala Lumpur's Bukit Bintang and Kuala Lumpur City Centre, KLCC * Las Vegas's Las Vegas Strip, Strip (Bellagio (resort), Bellagio, The Shops at Crystals, Crystals, The Forum Shops at Caesars, Forum Shops, Grand Canal Shoppes, The Venetian) * Leeds' Victoria Quarter * Lisbon's Avenida da Liberdade (Lisbon), Avenida da Liberdade * London's Bond Street and Sloane Street * Los Angeles' Beverly Hills (Rodeo Drive) * Madrid's Calle de Serrano * Manila's Ayala Avenue * Medellín's El Poblado * Melbourne's Collins Street, Melbourne, Collins Street * Montería's Montería, Passage of the Sun * Montreal's St. Catherine Street, Rue Sainte-Catherine * Mexico City's Avenida Presidente Masaryk * Milan's Via Monte Napoleone * Moscow's Tverskaya Street and Stoleshnikov Lane * Munich's Maximilianstraße (Munich), Maximilianstraße * New York City, New York's Madison Avenue, Fifth Avenue and SoHo *
Paris Paris () is the Capital city, capital and List of communes in France with over 20,000 inhabitants, most populous city of France, with an estimated population of 2,175,601 residents , in an area of more than . Since the 17th century, Paris ha ...

Paris
' Champs-Élysées, Avenue Montaigne and Rue du Faubourg Saint-Honoré * Palm Beach, Florida, Palm Beach's Worth Avenue * Panama City's Multiplaza, Multiplaza Pacific * Philadelphia's Walnut Street (Philadelphia), Walnut Street * Prague's Pařížská * Rome's Via Condotti * San Francisco's Union Square, San Francisco, Union Square * San Jose, California, San Jose’s Santana Row * Santiago's Alonso de Cordoba * São Paulo's Rua Oscar Freire * Seoul's Cheongdam-dong *
Shanghai Shanghai (, , Standard Chinese, Standard Mandarin pronunciation: ) is one of the four Direct-administered municipalities of China, direct-administered municipalities of the China, People's Republic of China. The city is located on the sou ...

Shanghai
's Huaihai Road, Middle Huaihai Road *
Singapore Singapore (), officially the Republic of Singapore, is a sovereign state, sovereign island city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, bor ...

Singapore
's Orchard Road * Stockholm's Biblioteksgatan * Sydney's Castlereagh Street * Taipei's Xinyi District, Taipei, Xinyi District * Tel Aviv's Kikar Hamedina *
Tokyo Tokyo (Japanese language, Japanese: , ''Tōkyō'' ), historically known in the west as Tokio and officially the Tokyo Metropolis (, ''Tōkyō-to''), is capital of Japan, the capital and most populous Prefectures of Japan, prefecture of Japan ...

Tokyo
's Ginza and Aoyama, Minato, Tokyo, Aoyama * Toronto's Mink Mile * Vancouver's Alberni Street (Vancouver), Alberni Street * Warsaw's Nowy Świat Street * Zürich's Bahnhofstrasse


See also

* Behavioral economics * Collecting * Commodity fetishism * Conspicuous consumption * Designer label * Inferior good * Mid-luxury * Necessity good * Positional good * Sumptuary law *
Veblen good A Veblen good is a type of luxury good In economics, a luxury good (or upmarket good) is a good (economics), good for which demand (economics), demand increases more than what is proportional as income rises, so that expenditures on the good bec ...

Veblen good
s * Wealth effect * List of most expensive and valuable assets * Lists of most expensive items by category


References


Further reading

* * Heine, Klaus: (2011)
The Concept of Luxury Brands
'' Luxury Brand Management, No. 1, * Wiesing, Lambert: ''A philosophy of Luxury.'' London, New York: Routledge 2019.


External links



from the University of Michigan
Definition of "superior good" as a "normal good" synonym
from California State University {{DEFAULTSORT:Luxury Good Goods (economics) Brand management Luxury brands, Retailing by products and services sold de:Luxus sl:Luksuz