What is the effect of inflation on luxuries?

The major impact of inflation on luxuries is to reduce
consumers' demand for luxury goods and services.

Inflation
is defined as an increase in the general price level of goods and services in an
economy.  When there is inflation, the general price of all goods rises and people have
to spend more to purchase the same set of goods and services.  This, of course, tends to
cause hardship as people have to spend more simply to get the same
things.

In such a case, what is likely to happen to
spending on luxuries?  Luxuries are optional purchases.  When there is high inflation
and people must spend more on the necessities of life, there will of course be less
money for them to use on optional purchases.  This means that people will buy fewer
luxury goods.

As inflation rises, then, the demand for
luxuries decreases.