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Meaning & use

market-based

adjective·Academic

Last updated

UK/ˌmɑːkɪt ˈbeɪst/
US/ˌmɑːrkɪt ˈbeɪst/

Meanings

  1. adjectivebefore a noun

    Relating to a system or policy where prices, supply, and demand, rather than government planning, decide what happens.

    Grammar: Comes before the noun it describes: a market-based system, market-based reforms. Not used after a verb.

    Patterns

    • market-based system
    • market-based approach
    • market-based solution
    • market-based economy

    The government introduced market-based reforms to make hospitals compete for patients.

    Many economists prefer a market-based solution to reducing carbon emissions, such as a carbon tax.

    In a market-based economy, prices rise and fall according to what buyers are willing to pay.

  2. adjectivebefore a noun

    Using prices or financial incentives to encourage particular behavior, rather than rules or direct orders.

    Grammar: Also before a noun, often with words like 'incentive', 'mechanism', or 'tool'.

    Patterns

    • market-based incentive
    • market-based mechanism
    • market-based tool

    The city tried a market-based incentive: drivers who avoided rush hour paid lower tolls.

    Market-based mechanisms like cap-and-trade aim to cut pollution at the lowest cost.

Common combinations

market-based economy
A market-based economy depends on private businesses and free competition.
market-based reform
The education minister announced market-based reforms to let parents choose schools.
market-based approach
They took a market-based approach to managing water supplies.
market-based solution
A market-based solution to traffic congestion might involve charging drivers to enter the city center.
market-based system
The country moved from central planning to a market-based system in the 1990s.

Synonyms and how they differ

free-market
Similar, but 'free-market' often suggests very little government involvement, while 'market-based' can still allow some regulation.
commercial
Focuses on business and profit rather than on the role of prices and competition in a whole system.

Opposites

state-controlledcentrally planned

Word family

market noun
The place or system where goods are bought and sold.
marketeer noun
A person who works in marketing or promotes a product.

Commonly confused: market-based or marketing-based?

market-based vs marketing-based

Not a standard compound; 'market-based' refers to the market system, while 'marketing-based' would describe something based on advertising or promotion.

Practice

The government introduced a ______ system for allocating permits, letting companies buy and sell them.

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