Soaring Prices Test Wealthy's Will to Pay
Corrections & Amplifications</br></br>Luxury goods that see increased demand with higher prices are called Veblen goods, named for American economist Thorstein Veblen, who described the phenomenon. A Page One article on Monday about spending by the wealthy incorrectly said such items were Giffen goods as identified by Scottish economist Robert Giffen.</br></br>(WSJ March 4, 2014)</br></br>Despite expanding into new markets, the luxury-retail business has been relying on price increases to drive sales. Now, even the very wealthy are nearing the limits of what they are willing to spend.</br></br>In the past five years, the price of a Chanel quilted handbag has increased 70% to $4,900. Cartier's Trinity gold bracelet now sells for $16,300, 48% more than in 2009. And the price of Piaget's ultrathin Altiplano watch is now $19,000, up $6,000 from 2011.