| A | B |
|---|
| 401 (k) plan | a common type of retirement plan that allows employees to save pretax income, often matched in part by the employer |
| Adaptation | the response of consumer and business behavior to a change in conditions-for example, the alteration of behavior to reduce the negative impact of global climate change |
| Adverse selection problem | the tendency of insurance – health insurance in particular – to be purchased by those who are more likely to make claims |
| Catastrophic health insurance | insurance that covers the very high expenses incurred by a serious illness or accident but does not cover ordinary health expenses |
| Cap-and-trade system | – (tradable pollution permits) a government-endorsed “allowance” that gives a business the right to emit a particular amount of pollution. These permits can be traded or sold among private businesses |
| Carbon tax | a tax on fuels that depends on the amount of carbon in the fuel |
| Command-and-control approach | an approach to regulation that directly specifies certain market outcomes and activities to achieve desirable goals |
| Defined benefit plan | a retirement plan that pays retirees a predetermined amount of money monthly |
| Defined contribution plan | a retirement plan that pays retirees an amount of money that depends on the return on investments |
| Demographic change | a changing distribution of groups in a population |
| Ecological damage | negative effects of pollution on the functioning of an ecosystem, including harm to plants and animals |
| Employer health insurance plans | a health insurance plan set up by and partly paid for by an employer. Employees are usually required to pay a fraction of the cost in monthly premiums. |
| Employer retirement plans | provisions for retirement that an employer contributes to on behalf of an employee |
| Energy conservation | a shift in economic activities to reduce the use of energy |
| Financing gap | a mismatch between the amount of money coming in and the amount of money that needs to be paid out. In this book the term financing gap refers to a long-term problem facing the Social Security System |
| Fossil fuels | nonrenewable energy sources such as oil and natural gas that have been produced over millions of years by the transformation of dead animals and plants |
| Four-legged stool | a metaphor for the four main components of retirement income: part-time work, individual savings, employer retirement plans, and Social Security |
| Harm to environmental amenities | negative effects of pollution on natural resources that humans enjoy, such as lakes, beaches, and clear skies |
| Healthcare life cycle | the pattern of spending on healthcare over the span of an individual’s life, in the absence of government or business-supported health insurance |
| Healthcare poverty problem | the problem that poor people often do not have enough income to pay for health insurance |
| Healthcare uncertainty problem | the problem that people don’t know how much money they will need to pay for their healthcare in old age |
| Health impacts | (of pollution) the loss of life and reduction of health caused by pollution |
| Life cycle theory of retirement | the pattern of spending and saving for retirement over an individual’s lifetime in the absence of government and business-supported assistance for the elderly. Posits that people spend when they are young, save during the latter part of their working lives, and spend when they are retired. |
| Life expectancy | the number of years an individual is expected to live, given his or her current age and available medical knowledge |
| Marginal cost of extraction | the amount of money that it takes to get one more tone of coal, one more barrel of oil, or one more cubic foot of natural gas out of the ground |
| Market-based approach | government action to change the price signals faced by consumers and producers in order to move their behavior in the desired direction, such as polluting less or emitting fewer greenhouse gases |
| Material and crop damage | negative effects of pollution on human structures and agriculture |
| Medicaid | a government-funded health plan that helps cover healthcare costs of low-income children, parents, and others |
| Medicare | a government-funded health plan that helps cover healthcare costs of older individuals |
| Mitigation | the implementation of policies and programs designed to significantly reduce emissions of greenhouse gases |
| Net worth | total household assets minus liabilities |
| Nuclear power | an energy source using contained nuclear reactions to generate electricity |
| Nonrenewable energy | sources of energy like fossil fuels that have only a limited supply |
| Old-age dependency ratio | the ratio of the size of the older population (65 years and over) to the size of the working-age population (ages 20 through 64) |
| Peak oil theory | the theory that global production of oil may be nearing its highest point |
| Personal savings rate | savings by households as a share of disposable income |
| Pollution | one important negative externality from economic activity |
| Privatization | the shifting of certain aspects of government programs, such as Social Security, to the private sector |
| Progressive | social security formula where low-income workers get back higher percentages of their lifetime average incomes than do better-paid workers |
| Renewable energy | energy sources such as wind and solar power |
| Retirement poverty problem | the problem that poor people often don’t have enough income to save for retirement |
| Revealed preference | one way of putting a monetary value on the health impacts of pollution, based on analyzing the choices that people make in their daily lives to change their risk of death or injury. Also used to assess the monetary value of harm to environmental amenities. |
| Single-payer system | a proposed health plan in which healthcare spending for everyone is paid for through the government |
| Social Security | the government program that provides income support to older citizens who have contributed during their working years |
| Stated preference | one way of determining the monetary value of the damage done by pollution, based on surveys of individuals or other direct queries |
| Third party | – in healthcare, an external organization that pays for healthcare services for an individual |
| Value of a statistical life | a monetary value economists treat as the cost to society of an additional death – in this book, from pollution |
