An analysis of luxury brand purchasing behavior

It is the developed countries with capitalism that creates luxury brands. However, there are many developing countries with people willing to buy luxury products. In 21st century of global economy, sales of luxury goods are ever increasing. Especially, in case of developing countries, as their income level increased, the demand for luxury goods has increased as well. However, increase in consumer’s income level cannot fully explain constant demand for luxury goods. So, behavioral economics that studies decision making psychology of consumers is needed. Recently, theories on neuroscience are helpful in the research on behavioral economics. It is likely that consumers that purchase luxury goods base their decisions on emotions and not on rationality. However, the specific mechanism that provokes people’s emotion is still a mystery.