Latest Innovation Knocking-in Luxuries Industry

In economics, a luxury good (or luxury good) is a good whose demand increases more than proportionally as income increases, so that expenditures on the good become a larger proportion of total expenditure. Luxury goods contrast with basic necessities, where demand increases proportionally less than income. Luxury items are often used synonymously with superior items.

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Some of the key players of Luxuries Industry:

LVMH, Ralph Lauren, Estee Lauder, Luxottica, Kering, Richemont, Ralph Lauren, L’Oreal, PVH, Swatch Group, Tapestry, Shiseido Group, Tiffany, Chow Tai Fook Jewellery Group, Lao Feng Xiang, Rolex, Prada Group, Michael Kors Holdings, Hermes, Burberry Group, Puig, Titan, Coty, Armani, Christian Dior, Hugo Boss, Onward Holdings, Fossil Group, Pandora, Swarovski Group

The word "luxury" originated from the Latin word luxus, which means indulgence of the senses, regardless of cost. A luxury good can be identified by comparing the demand for the good at one point in time with the demand for the good at a different time, with a different level of income. When income increases, the demand for luxury items increases even more than income. When incomes go down, the demand for luxury goods goes down even more than income. For example, if income increases 1% and demand for a product increases 2%, then the product is a luxury good.

Luxury goods have a high elasticity of demand based on income: as people get richer, they will buy proportionally more luxury goods. This also means, however, that if there is a decrease in income, your demand will be reduced more than proportionally. The income elasticity of demand is not constant with respect to income and can change sign at different levels of income. In other words, a luxury good can become a necessity or even an inferior good at different income levels.