[marme]

That is not how any market works. Just because your customers have more money does not change the supply or demand for your product. A luxury apartment fetches a high price because there is demand from tenants willing to pay the luxury price. No one is going to pay more for the same apartment unless there is more demand for apartments than there is supply like you have in NYC and SF. More income causes prices to rise because people start outbidding each other for everything. Why sell your house for 100k when someone else is offering 120k

[ewams]

This is exactly how the market works and will continue to as long as humans are involved.

First hand experience here that seems to escape the engineering brethren that have never glimpsed into sales: The same exact product is sold to every customer at a different price. Yes sometimes there is a higher demand which might push price a tad but most of the time there is not. I always enjoy when people on HN complain that so-and-so doesn't publish pricing on their website. Of course not, because then they would lower their revenue. It also removes leverage, sometimes it makes sense to sell something at a lower cost today to negotiate some terms, and then down the road either sell at volume or raise the price. Sometimes you just like someone and give them a discount. Oh its the government? Yea raise the price a LOT. etc etc.

[eaandkw]

You should see how the rent goes up in military towns every time our BAH goes up. If everyone knows the tenants are receiving more money the general price for rents will tend to go up.

This might be the unintended consequences of a wage/ price spiral.

[DuskStar]

If I remember correctly, there's no benefit to the soldier involved if they choose an apartment that only costs half of the Basic Allowance for Housing - they don't get to keep the surplus.

[eaandkw]

No, they get to keep any left over money...if there is any. One way owners can somewhat control who can rent property is by raising the rent to the point that it is unaffordable to junior enlisted servicemen.

[white-flame]

Surely this exact situation is how university prices skyrocketed in line with increased loans to students.

[getsugablitz2]

Of course your customers having more money means that businesses will try to capture that excess, that's the foundation of price discrimination. The whole concept of coupons is that some customers with more money won't care enough about the price difference, so they'll ignore the coupons and pay full retail price while more price sensitive customers will use the coupon and pay less.