Odd definition of luxury goods, which makes me wary of the division of necessity vs luxury:
The Deutsche Bank Research report defined luxuries as “goods or services consumed in greater proportions as a person’s income increases” and necessities as those goods or services that make up a smaller proportion of spending as a person’s income increases.
Well the interesting part is the ratios they give, not the definition of luxury.
It also assumes people are rational consumers, which obviously isn't true. Why would people go into (credit card) debt for something they don't need (luxury)?
Impulse control? Bad financial education? People declare bankruptcy anyway?
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[ 3.5 ms ] story [ 31.5 ms ] threadThe Deutsche Bank Research report defined luxuries as “goods or services consumed in greater proportions as a person’s income increases” and necessities as those goods or services that make up a smaller proportion of spending as a person’s income increases.
It also assumes people are rational consumers, which obviously isn't true. Why would people go into (credit card) debt for something they don't need (luxury)?
Impulse control? Bad financial education? People declare bankruptcy anyway?