The Hedonism Index

Barry Ritholtz:

You may have missed a fascinating article last week in the WSJ on a new breed of indice: Those based on luxury goods.

We have noted the bifurcated economy many times in the past. These new measures show exactly how much more freely spending the higher income demographics are versus the masses.

A 2005 Citigroup research note quantifies it rather precisely: The top 20% of American earners now account for between 37% and 70% of total consumption. That's quite a broad range, and like asset ownership, it is very disproportionate in numbers. You can clearly see the difference in spending patterns in the chart at right, showing the Merrill Lynch Lifestyle Index versus the Morgan Stanley Consumer Discretionary Index.

The higher end goods are selling much more briskly than the non-luxe brands.

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This page contains a single entry by Jim Zellmer published on May 1, 2007 8:44 AM.

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