Meaning & use
economic incentive
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Meanings
nouncountable
Something that encourages people or businesses to act in a certain way by affecting their money or costs.
Grammar: Countable: you can talk about one incentive, several incentives, or an incentive to do something.
Patterns
- an economic incentive to do something
- an economic incentive for someone
- offer/provide an economic incentive
- tax incentives
The government offered an economic incentive to companies that hired young workers.
Higher fuel taxes act as an economic incentive to drive less.
Without an economic incentive, few farmers would switch to the new crop.
noununcountabletechnical
The general system of rewards and costs in a market that shapes how people spend, work, or invest.
Grammar: Used without 'a' or a plural when speaking about the idea in general.
Patterns
- economic incentive matters
- respond to economic incentive
- create economic incentive
Economists study how economic incentive shapes behavior in a market.
When prices rise, economic incentive pulls more suppliers into the market.
Word forms
| plural | economic incentives |
|---|
Common combinations
- provide an economic incentive
- The city provided an economic incentive for owners to repair old buildings.
- a powerful economic incentive
- Cheap loans are a powerful economic incentive to buy a home.
- tax incentive
- A tax incentive can persuade firms to invest in poor regions.
- respond to incentives
- People respond to incentives, so small price changes can alter habits.
- financial incentive
- She had a financial incentive to finish the project early.
Synonyms and how they differ
- financial incentive
- Focuses only on money rewards, while 'economic incentive' can also include costs, taxes, and prices.
- motivation
- A general word for any reason to act, not necessarily connected with money or the economy.
- inducement
- More formal and often suggests persuading someone to do something they might not want to do.
Opposites
Word family
- incentive noun
- A general reason or reward that encourages action.
- incentivize verb
- To give people a reason or reward to do something.
- economy noun
- The system of money, trade, and production in a country.
- economist noun
- A person who studies or works in economics.
Commonly confused: economic incentive or economical? economic incentive or incentive?
economic incentive vs economical
'Economical' describes something that saves money; 'economic incentive' is about rewards and costs in the economy.
economic incentive vs incentive
'Incentive' alone can be any kind of encouragement; adding 'economic' makes it specifically about money, prices, or costs.
Practice
Which sentence uses 'economic incentive' correctly?
Choose one answer.
'Economic incentive' is a noun phrase meaning a money-related reason to act, so 'gave firms an economic incentive to invest' fits. Option 2 confuses it with the adjective 'economical', and options 3 and 4 wrongly use the phrase as a verb.
Make it your own
Write a sentence using “economic incentive”, then check it and compare it with the examples above.