Pricing Luxury: Explaining the Social Construction of Exorbitant Prices in Luxury Fashion

Abstract

Luxury fashion has long been a staple of the elite class and a marker of broader economic inequality. The primary mechanism of exclusion? Price. This thesis advances the sociological analysis of pricing to understand how the exorbitant prices characteristic of luxury fashion are constructed. Through existing literature on price-setting in similar markets coupled with interviews of luxury fashion experts and consumers, I identify specific sociological factors that culminate in exorbitant prices. Central to my findings is the relational nature of price and the symbolic meanings ingrained in luxury fashion prices. I argue that luxury brands cultivate relationships with customers through gifting and organizing experiences that legitimize high prices. Furthermore, high prices effectively signify consumers’ status and relationship to audiences that recognize the meanings of such prices. Price secrecy also preserves the distinctiveness of luxury fashion, which ultimately reflects the values of aspiration, wealth, and exclusivity defining of the luxury goods economy.