- published: 04 Feb 2015
- views: 13180
In economics, a luxury good is a good for which demand increases more than proportionally as income rises, and is a contrast to a "necessity good", for which demand increases proportionally less than income. Luxury goods are often synonymous with superior goods and veblen goods.
Luxury goods are said to have high income elasticity of demand: as people become wealthier, they will buy more and more of the luxury good. This also means, however, that should there be a decline in income its demand will drop. 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 normal good or even an inferior good at different income levels, e.g. a wealthy person stops buying increasing numbers of luxury cars for his automobile collection to start collecting airplanes (at such an income level, the luxury car would become an inferior good).
Some luxury products have been claimed to be examples of Veblen goods, with a positive 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.
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Apple has taken a beating in the last few weeks, shedding about two billion dollars in market capitalization. However, the company is still a winner because of the Apple Watch. Anybody that matters in fashion is wearing it, marking Apple as one of the world’s top luxury brands. A big winner you might not have heard of: Palantir. The company builds software that ties databases together, making it easier to search and analyze information. It recently ranked fourth on a list of the most valuable startups, following Uber, Xiaomi, and Airbnb. Palantir booked more than one billion dollars in 2014, cementing its position among the unicorns. The other big winner here is the U.S.: 72 of the 108 unicorns are based in the U.S., while only nine hail from Europe, pointing to the country’s dearth of in...
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http://www.essec.edu | The goal of the MBA in International Luxury Brand Management is to help participants become permanent learners, able to develop a global vision of the business, leadership and managerial abilities in order to successfully manage a luxury brand.
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http://www.essec.edu | The goal of the MBA in International Luxury Brand Management is to help participants become permanent learners, able to develop a global vision of the business, leadership and managerial abilities in order to successfully manage a luxury brand.
http://www.essec.fr | Master class "The Business of Luxury and the Foundations of Luxury Brand Management" by Denis Morisset, ESSEC Business School in March 2013. Since it was created in 1995, the MBA in International Luxury Brand Management has become the world leader in training managers for companies in this sector, and remains the only sector-specific MBA in International luxury brand management. Its partnership with leading luxury brands and institutions enables it to provide top-level international management training for this ever-changing sector. For more information : http://www.essec.edu/programs/mba-programs/mba-in-international-luxury-brand-management.html
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