Expensive Luxury Gadget

Luxury goods are said to have high income elasticity demand: as people become wealthier, they will buy more and more the luxury good. This also means, however, that should there be a decline in income its demand will drop. Income elasticity demand is not constant with respect to income, and may change sign at different levels income. That is to say, a luxury good may become a normal good or even an inferior good at different income levels, e.g. a wealthy person stops buying increasing numbers luxury cars for his automobile collection to start collecting airplanes (at such an income level, the luxury car would become an inferior good).
Defining luxury
The concept luxury has been present in various forms since the beginning civilization. Its role was just as important in ancient western and eastern empires as it is in modern societies. With the clear differences between social classes in earlier civilizations, the consumption luxury was limited to the elite classes. It also meant the definition luxury was fairly clear. Whatever the poor cannot have and the elite can was identified as luxury. With increasing ‘democratization’, several new product categories were created within the luxury market which were aptly called – accessible luxury or mass luxury. This kind luxury specifically targeted the middle class (or what is sometimes termed as aspiring class). As luxury penetrated into the masses, defining luxury has become ever so difficult.