Okay, if we want to limit ourselves to economics jargon rather than vernacular.

>Practically this means luxury goods are purchased to convey status

No, practically it means poor people aren't buying them much. Only some luxury good purchasing is related to status signaling.

>Premium is the word that means paying extra for an increase in quality

I'm not aware of a context where that would be the standard definition, though in some contexts it may be the excess portion of the price.