Economic Cost of Pandemics

By | July 11, 2016

A pandemic influenza outbreak in the United States could have economic costs nearly double the total amounts experts have previously calculated, depending on how the public, government and businesses respond to an epidemic, according to policy and risk experts in a new study.

Using a methodology also applicable to the Zika virus and other biothreats to calculate the total cost of an influenza outbreak, the experts conclude that if the public used influenza vaccines during a pandemic outbreak the U.S. GDP loss would be

$34.4 billion. It would be a lot higher, however, if the public didn’t use vaccines: $45.3 billion.

That’s a much larger price tag than other studies have found. But it’s not just the use or non-use of vaccines that drives costs, the researchers note.

Resilience actions can soften the overall impact of an influenza outbreak.

Most economic studies of pandemic influenza focus on direct impacts such as vaccination, hospitalization, injury, death and business revenue or profit losses from reduced workforce. But those conventional direct and indirect economic impacts related to lost work days “can be exacerbated greatly by various types of behavioral reactions and over-reactions by the public, businesses and governments,” says Fynnwin Prager of California State University, Dominguez Hills. Behavioral reactions include, for example, voluntary and mandatory avoidance of public places and interactions, such as sporting events, subway stations, quarantines and travel bans, with significant economic ripple effects.

The new study by Professor Prager and colleagues Dan Wei and Adam Rose of University of Southern California – “Total Economic Consequences of an Influenza Outbreak in the United States”– was published in the online version of Risk Analysis, a publication of the Society for Risk Analysis.

In their study, the authors estimate “the relative prominence of the various economic consequence types,” as well as complicating factors, many of which have not been addressed in any prior study. These complicating factors include different types of avoidance behavior.

They also include what are called resilience actions, such as partnering with businesses to encourage individuals to return to work sooner and make up for lost work through flexible working hours to recapture lost production. These resilience actions can soften the overall impact of an influenza outbreak.

The analysis “illustrates the importance of a more comprehensive framework for accurately measuring the macroeconomic impacts of biothreats,” the authors write.

About Andrea Wells

Andrea Wells is a veteran insurance editor and Editor-in-Chef of Insurance Journal Magazine. More from Andrea Wells

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