Luxury And Its Costs
In economics, a luxury item is something that is bought with a higher value than the monetary value paid for it; i.e. a commodity is a luxury if its price/value exceeds the monetary value. Luxury goods tend to have high initial prices but quickly depreciate in their market prices, especially in today’s difficult global economy. The most valuable luxury goods tend to be those that are durable, unique and/or custom made, or are highly customized.
The goods or services considered to be a luxury to have certain qualities that distinguish them from other goods or services. For example, luxury items are normally larger or weight much heavier than the rest of the market, because they are considered as special. Luxury goods generally carry a higher price tag; however, the buyers do not necessarily feel that they have been cheated. In economics, a luxury item is a luxury good that has a high demand but low supply, so that increases in demand due to economic factors more than the increase in supply, so that expenses on this good quickly become a higher proportion of total income than normal.
So what then constitutes a luxury? Defining luxury is an extremely difficult process. What is luxury to you may not be what someone else would consider luxury to you. For example, one of the most expensive things to some may be a brand new car, while it may only be a little something for your children, but it would be considered luxury for someone else. It is difficult to say exactly what constitutes luxury, and what is a luxury to different people.