Luxury items tend to be the objects of desire for many people, and their value derives both from their perceived utility, i.e. They’re expected to provide enjoyment or pleasure, and from the inherent value they hold for the purchaser. In economics, a luxury commodity is usually a good whose sale increases more than proportional to the increase in disposable income, so that expenses on the commodity become a larger proportion of overall sales. This means that the goods and services enjoyed by the wealthy will more than offset any additional expenses incurred by them and allow the wealthy person to buy more things, which increases their net worth.
Common examples of luxury items include expensive wines, clothing, art collections, art and antique pieces, and certain types of machinery. In rare instances, luxury items can also be food, because certain foods can be expensive, rare, or otherwise debatable; hence their purchase becomes less important when the income level is small. One of the most common reasons for the acquisition of luxury items is status; connoisseurs of fine art, and the like, desire to have these objects not only for their aesthetic beauty but because they represent a social position. The acquisition of luxury items usually represents an investment in one’s social and economic value, which can only be positive. Luxury items are always considered to be more valuable than things that are not highly expensive, because they tend to last longer, make more money, and offer more pleasure than other less expensive goods and services.
In addition, consumers tend to perceive brands associated with luxury as more trustworthy and reliable than brands not associated with luxury. Luxury brands are also easier to identify and, because of the larger size of the brand, are easier to establish in the marketplace. This allows the luxury brand to claim a significant share of the total market, thus creating greater profit and employment opportunities for the company. Finally, consumers tend to associate more strongly with luxury brands than non-luxury ones, and are willing to spend more money and longer on them, if they feel that the price reflects the perceived value of the product.