Vol: 14, Issue: 3 2024

Page: 19-35

How Do Factors That Affect The Consumption Of Personal Luxury Goods Vary Across Middle-Income And High-Income Households In India?

Aahana Jain

Received Date: 2024-05-17

Accepted Date: 2024-08-03

Published Date: 2024-08-14

http://doi.org/10.37648/ijtbm.v14i03.003

This paper studies how factors that affect the consumption of personal luxury goods vary across Middle-income and High-Income households in India. It explores how income and price changes impact luxury consumption using primary data from a survey of 100 participants in Mumbai, India. It uses secondary data to support the data collected from the survey. The study analyzes behavioural economic theories to understand consumption behaviour. It also uses economic theories like the Keynesian Consumption Function, income elasticity of demand, and price elasticity of demand to highlight the distinct behaviours of each income group. The findings reveal that middle-income households are much more sensitive to price and income changes as compared to high-income households for a variety of reasons that are explored in the paper.

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