There is a simple rule that every student of Economics 101 knows:
The higher the price of an item, the lower the quantity demanded becomes.
This is because a rational person would feel that the item is not worth it above a given price point.
However, there are many goods that do not follow this law. Veblen goods describe a group of goods where paradoxically, higher prices result in greater demand. Examples of Veblen goods include luxury cars, designer jewellery and trending fashion items such as Air Jordans.
The simple explanation is that these goods are not demanded because of their functionality and usefulness, but because they are status symbols. Possession of a Veblen good suggests that you are financially successful and wealthy enough to disobey the law of demand and get away with it.
For the purchasers of Veblen goods, the fact that they are so expensive and exclusive make them appealing.
