
Low-income families spend 40% of their money on luxuries - mudil
http://www.marketwatch.com/story/low-income-families-spend-40-of-their-money-on-luxuries-2017-06-28
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imba404
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.

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madcaptenor
This is a technical definition in terms of "elasticity of demand": see
[https://en.wikipedia.org/wiki/Income_elasticity_of_demand](https://en.wikipedia.org/wiki/Income_elasticity_of_demand)
. Unfortunately it doesn't agree with what normal people hear when they hear
the word "luxury".

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sharemywin
so the article basically restated the definition of luxury. The rich spend
more than the poor on luxury items.

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cbanek
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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sharemywin
if your life sucks anyway why would you care.

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1812Overture
Luxuries include: car, insurance, childcare, telephone, internet, and
household supplies. We're not talking about caviar and Coach bags here.

