In economics, a luxury commodity is something that is bought by more people, or is something that is bought by a large percentage of the population, increasing in price faster than the average rate of inflation, and has no substitutes, so there is an increased demand even after the supply has been leveling off. In economics, a luxury commodity is a good which increases in value more than percentageately as income increases, meaning that expenses on the luxury item become a smaller percentage of overall income. This makes them valuable to buyers.
Luxury goods can be expensive, depending on how rare they are, and what quality of them. There is a Luxury Goods Tax in place to control the luxury goods market, but it isn’t very effective. As a general rule, the more rare and unique the commodity, the more costly it will be. A Chineseiche for example, may be worth hundreds of thousands of dollars, but because it is extremely rare, it is priced so high relative to other Chineseiche’s. That drives up its value, while keeping its scarcity from buyers.
Luxury goods such as cars, planes, yachts, art collections, and properties in particular are all considered luxury goods. In some cases, the definition of luxury goods may include non-luxury goods sold at a high price to make a profit, which is why designer clothing, rare collectibles, or works of art in galleries are often in this category. Luxury goods can also include services like interior design, massage therapy, and hairdressing, among others. The definition of luxury goods is relative to each individual and can change with society and time.