Sliding Scale Fees

AAA

DEFINITION of 'Sliding Scale Fees'

A type of tax or cost that may change according to an associated factor. A sliding scale is designed to capture value according to the movement of an underlying variable - most commonly income - so that those with a higher value pay more. This type of pricing has the effect of spreading out the consumption of goods and services, although it may reduce consumption for the wealthy.

INVESTOPEDIA EXPLAINS 'Sliding Scale Fees'

Sliding scales fees are used to require those who have the ability to pay more to actually pay more. For example, a hospital may not charge a poor or uninsured patient the market value of the medicine that he receives for an ailment, but may charge a wealthy or insured patient the market value. Companies and organizations may make up for a revenue short fall from providing below-market price services to the less fortunate through grant funding or donations.

RELATED TERMS
  1. Government Grant

    A financial award given by the federal, state or local government ...
  2. Grant

    The issuance of an award, such as a stock option, to key employees ...
  3. Price Elasticity Of Demand

    A measure of the relationship between a change in the quantity ...
  4. Charitable Donation

    A gift made by an individual or an organization to a nonprofit ...
  5. Pricing Power

    An economic term referring to the effect that a change in a firm's ...
  6. Factor Market

    A marketplace for the services of a factor of production.
RELATED FAQS
  1. What is the difference between marginal utility and marginal value?

    Depending on the context, marginal utility and marginal value can describe the same thing. The key word for each is "marginal," ... Read Full Answer >>
  2. In economics, what is an index number?

    Economists often make comparisons between sets of data across time. For example, a macroeconomist might want to measure changes ... Read Full Answer >>
  3. What role does the agency problem play in the modern Health Care industry?

    Agency problems vary from health care system to health care system, and not all economists agree on the degree and desirability ... Read Full Answer >>
  4. What is the utility function and how is it calculated?

    In economics, utility function is an important concept that measures preferences over a set of goods and services. Utility ... Read Full Answer >>
  5. What role do transaction costs play in marginal utility analysis?

    The term "transaction costs" is much broader in economics than it is in general finance lingo. The traditional definition ... Read Full Answer >>
  6. Which is more important to a nation's economy, the balance of trade or the balance ...

    There is no question the composition of a country's balance of payments is more important than its balance of trade. This ... Read Full Answer >>
Related Articles
  1. Economics

    A Practical Look At Microeconomics

    Learn how individual decision-making turns the gears of our economy.
  2. Options & Futures

    A Guide To Investing In Consumer Staples

    These companies may not be flashy but they offer investors structure and diversification.
  3. Personal Finance

    Why We Splurge When Times Are Good

    The concept of elasticity of demand is part of every purchase you make. Find out how it works.
  4. Economics

    What's a Centrally Planned Economy?

    A centrally planned economy is one where the government controls the country’s supply and demand of goods and services.
  5. Savings

    Inflation for Dummies

    Inflation may seem like a straightforward concept, but it is more complex than it appears. We examine its varieties and causes.
  6. Economics

    What Is a Giffen Good?

    A Giffen good is a product whose demand increases as its price increases, and falls when its price falls.
  7. Professionals

    Will Consumer Spending Save 2015?

    Consumer spending is considered an important number (and it is), but a savvy investor will always look at "why" rather than just "what." You should too.
  8. Economics

    Explaining Budget Surplus

    Budget surplus is an economic term describing a situation where revenue exceeds expenditures.
  9. Economics

    Will the Selloff in China Hurt the Global Economy?

    Though China is the world’s second largest economy, its volatility in the stock market is unlikely to have an impact on the global or Chinese economy.
  10. Fundamental Analysis

    How is the Demand Schedule Calculated?

    A demand schedule is a table that lists the quantity demanded of a good at different price points.

You May Also Like

Hot Definitions
  1. Hedging Transaction

    A type of transaction that limits investment risk with the use of derivatives, such as options and futures contracts. Hedging ...
  2. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the ...
  3. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  4. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  5. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  6. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!