What effect does the financial crisis have on the luxury fashion Essay

What effect does the financial crisis have on the luxuriousness fashion market - Essay ExampleA extravagance good is a good for which the demand of the consumer increases as the income level increases. Luxury goods have always been a symbol of prosperity and wealth for ages, for the spendthrifts, who desire and wonder buying. Owning and wanting to be the owner of luxury items such as the latest designer clothes, jewelry, watches, is a recreation on its own. Items that comes with a heavy price tag than ordinary items and have a known print name is identified as luxury item. In economics, luxury goods have said to have soaring elasticity of demand, which means that when buyers become wealthier they would like to spend more and more cash on the luxury items. It also means that when there is a turn down in income level there go away be a decrease in demand. Both income and demand be directly proportional to all(prenominal) other, if one increases the other rises as well and vic e versa. Income elasticity of demand is not constant with venerate to income, and the demand may changes at different income levels. That is to say, a luxury good becomes a normal or an inferior good at a higher income, if we take an example of a rich soul who would stop buying increasing numbers of luxury cars for his automobile collection to start collecting airplanes as his purchasing power increases. Some manufactured products, got the status of luxury item due to their quality, design and weaken performance as compared to the products, which are said to be the subsitute of the item. More importantly, due to an increased competition in the market, consumers are less brand loyal and would switch to another brand easily. To retain customers, it becomes essential that the luxury item should maintain and improve the functionality, features and style, with increased durability and performance. Luxury goods tend to play a springy role of status symbol as these goods identified the purchasing power of people who own them. These goods are not necessarily