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Economic and Psychological Concepts Behind Luxury Consumption

What comes to mind when you think of brands like Chanel, Prada, and Dior? It’s probably images of extortionate price tags. Boasting price ranges that an average middle-class person probably can’t afford, it’s well known that these luxury brands are highly sought after in society. Luxury goods have been the topic of controversy for decades, as some people value the craftsmanship and rich history behind these brands, while others criticize the inaccessibility of luxury companies and their unethical practices. Despite the controversies and high price tags, what allows luxury brands to thrive, and how do economic concepts tie into this?