4 ms·
Just a comment about definitions for the uninitiated: the term "luxury good" is a technical term in economics. We use something called "income elasticity" to co
by aggronn 14y ago
Just a comment about definitions for the uninitiated: the term "luxury good" is a technical term in economics. We use something called "income elasticity" to compare goods which is simply the ratio of (% change in quantity/% change price). If something has an income elasticity > 1 or 2 (depending on the textbook), its sufficient to call something a luxury good, regardless of what other connotations exist about the good. It doesn't mean that its a rich person's good in any particular way(s)--it just means that as income rises, quantity demanded rises disproportionately.
OP isn't doing anything wrong. Just thought I would drop some ECO101 for the interested.