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. Pricing Power

    An economic term referring to the effect that a change in a firm's ...
  4. Charitable Donation

    A gift made by an individual or an organization to a nonprofit ...
  5. Price Elasticity Of Demand

    A measure of the relationship between a change in the quantity ...
  6. Endowment Effect

    The endowment effect describes a circumstance in which an individual ...
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 Expansionary Policy?

    Expansionary policy is a macroeconomics concept that focuses on expanding the economy to counteract cyclical downturns. Expansionary policy can be implemented in one of two ways, or a combination ...
  5. Economics

    What's a Producer Surplus?

    In economics, producer surplus is the difference between the price at which the producer actually sells a product and the minimum price the producer would have accepted for the product. The surplus ...
  6. Economics

    What is Deflation?

    Deflation is an economic term used to describe a period of declining prices for goods and services. Decreases in the money supply, government spending, consumer demand and business investment ...
  7. Economics

    What's Demand Elasticity?

    Demand elasticity is the measure of how demand changes as other factors change. Demand elasticity is often referred to as price elasticity of demand because price is most often the factor used ...
  8. Economics

    Law of Supply

    The law of supply is one of the most fundamental principles in microeconomics. According to the law of supply, for all other things remaining constant, the higher the price of a good or service, ...
  9. Economics

    What's a Subsidy?

    A subsidy is a benefit given to an individual, business or institution, typically by the government. Subsidies are given to promote a social good or an economic policy. The government usually ...
  10. Economics

    What's Stagflation?

    Stagflation is the term for an economic period of slow growth, relatively high unemployment and rising prices. Other indicators of stagflation are reductions in gross domestic product and other ...

You May Also Like

Hot Definitions
  1. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  2. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  3. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  4. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  5. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  6. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
Trading Center