How to Tell If Something is a Luxury Good
The term “luxury goods” was coined, so as to distinguish the high-end, often overpriced items with the lower-end, more affordable products. The latter are referred to as luxury goods in an effort to separate the two categories. In other words, luxury goods are perceived to have higher value. They are usually perceived as items that are worth more than they are actually sold for. Although there is some truth to this, the opposite of luxury goods does exist.
There are items that are simply not luxury goods. These include sports equipment, toys, tools, and clothing. Yes, clothes can be considered luxury goods, but only if they are sportswear, work wear, or formal attire. Items such as these are frequently only purchased by affluent people as a form of throwaway clothing.
When it comes to necessities, many people fall somewhere between luxury goods and non-luxury goods. They fall somewhere between good things that are needed and things that are nice to have but not necessary. For instance, many people have a bed, a refrigerator, and a microwave, but they wouldn’t say they had the best of all worlds. In the same way, they wouldn’t say that a simple pair of jeans is luxury goods either. The key, then, is in being able to identify the distinction between luxury goods and non-luxury goods. If one can do so, the ability to purchase luxury goods will begin to become easier.
But what does it mean to say that something is luxury goods? Is it only the products that are not necessities that are luxury goods? What about the items that we think of as necessities, like food, shelter, clothing, entertainment, and education? Are they luxury goods? Today, we tend to think of items such as these as necessities, but is this always the case?
One thing that goes into determining whether something is a luxury good or not is the cost of acquiring it. If the item in question is very costly, then most people would consider it a luxury good. On the other hand, items that are more reasonable in price – such as clothing and food – would be considered luxury goods. Another thing that goes into luxury goods pricing is the general state of the economy. If the economy is in bad shape, then items that are considered necessities become more expensive than they otherwise would have been.
So how do you know if something is a luxury good? It would be hard to simply look at the price tag on the item and define it as one. After all, luxury goods don’t come cheap, but it’s possible to determine if an item is worth the money spent on it. Luxury goods pricing is based on the cost to produce them, as well as the cost of living in their chosen country.
For example, a watch is one of the most expensive luxury goods in the world. Because it is so valuable, it must also be made with top quality materials, and the manufacturing process must be done in a very controlled environment. If the watch is produced in China under terrible working conditions, the watch will most likely be poor quality and a waste of money for the buyer.
Luxury goods can be divided into two groups. There are items like clothing and luxury consumables like wine and food. The other group of luxury items is the non-luxury items like office chairs, watches, jewelry and accessories. Office chairs, for instance, are used by people every day, so an item like a high chair would probably be a non-luxury good while a fancy computer chair would most likely be a luxury good.