What describes positional goods in the luxury market?

Positional goods in the luxury market are defined by their value being contingent upon social comparison. This means that their worth is not solely derived from their intrinsic qualities or personal utility but is significantly influenced by how they are perceived relative to similar goods held by others. The allure and desirability of these products often stem from their exclusivity and the status they confer upon the owner in a social context.

Luxury brands capitalize on this by creating a sense of rarity and prestige around their products, ensuring that their value increases as they become less accessible to the average consumer. This aspect of positional goods plays a crucial role in luxury marketing, as brands strive to offer products that symbolize status and prestige among peers.

In contrast, options that refer to personal utility or affordability do not capture the essence of what makes a positional good desirable in the luxury market. While significant effort to obtain goods can sometimes correlate with luxury, it is the social comparison aspect that fundamentally defines their value.