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I employ an empirical classification method to construct a metric for classifying goods and services as luxuries or necessities. I start with one possible definition of a “luxury” as a good or service that is consumed in greater proportions as a person’s income increases. By the same token, a necessity would be a good or service whose consumption is proportionately less as a person’s absolute income increases. I use this definition to classify categories of expenditures as luxuries or necessities based on whether their share of consumption increases or decreases as income increases.
And if you click on the link, the categories are listed, with examples.
And for some reason you couldn't tell that wasn't the study's definition but only conjecture by the author's article? Hmmm...
What do you mean? I never referenced the study. I simply pointed out how ridiculous people are making an assessment on the definition of McDonalds being a luxury and Smoking and the Lottery being necessities. You responded on this very topic yourself. Are you calling yourself out here? Strange.
These are the same people who live for the moment with multiple kids they can't afford, blended families, cars they can't afford to maintain and college debt in jobs that pay poorly, then complain about how hard it is to buy a house and that all landlords are evil & greedy.
And that's true given the Economics definition of Luxury Goods. That's explained quite thoroughly in this post.
Where is the breakdown in your comprehension?
Actually the post you linked to does not discuss the actual definition used by the study. This has been pointed out multiple times. You're mixing up two different definitions.
Where is the breakdown in your lack of comprehension?
I saw your post. You're wrong. You need to look at the definition used in the study. I've pointed you to the Forbes write-up - which actually addresses the study - already.
While I don't like Forbes, they have a more accurate representation to the study. It's good to read the actual study.
Nope. Eating at McDonald's isn't healthy. The obesity rate is highest among the low-income, obesity-related diseases are debilitating, thereby exacerbating their inability to earn at least a middle class income.
For example, the demographic group with the highest obesity rate is Food Stamp recipients (source: USDA). Only the low-income qualify for Food Stamps.
You can't buy fast food on food stamps.
Look, if prices dropped on healthy foods we wouldn't have this problem. $5 for a small bag of oranges is mental. A pound of green beans shouldn't be more than $1.
And that's true given the Economics definition of Luxury Goods. That's explained quite thoroughly in this post.
Where is the breakdown in your comprehension?
Your post demonstrates lack of understanding. I just posted a link to another study that uses the same definition, that one with a handy list of categories.
This - from your post - is just not how the study's definition works.
Quote:
A necessity good is something needed for basic human existence. Think: basic food, non-designer clothing, basic shelter.
The study simply does not take into account "basic needs" or "human existence" in its definition of necessities. It only and exclusively looks at percentages of spending as income varies. Full stop.
I'll happily agree that it's a counterintuitive definition of luxury and necessity, but that's the one the study's author chose to use.
While I don't like Forbes, they have a more accurate representation to the study. It's good to read the actual study.
It is a strange definition, but I can see its attraction: It's empirical. Otherwise, you'd get bogged down in endless debate about whether a refrigerator is a necessity or not. Or what constitutes "non-designer clothing".
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