Preliminary Data on the Economic Costs of H1N1

Although the epidemic of swine flu continues to evolve here in Mexico, preliminary reports are starting to come out in regards to the economic costs of the swine flu epidemic.  Why care about economics?  Certainly, in the case of an epidemic, short-term priorities should be to prevent the spread of a disease.  However, in the long-term, the effects of this outbreak are likely to be overwhelmingly economic and measured in in terms of ruined businesses and lost opportunities.  In developed countries, where social safety nets are available, these economic human costs are less important because people can rebuild their lives, but here in Mexico, and in other developing economies, the lack of such safety nets mens that Influenza A (H1N1) could kill more people through poverty than by direct infection — and that is very important.  Furthermore, thinking in the absolute long-term, the ability to study diseases and produce vaccines in large quantities is ultimately a function of economic growth. 

Estimates and updates are changing frequently, so I took these links from today’s El Universal.

  • Preliminary costs of the economic shut-down here in the D.F. have ranged between $70M and $150M (USD) per day
  • Local businesses are arguing that there are signs of panic buying (El Universal)
  • Moody’s is reporting (El Universal) that they believe the outbreak will lead to a “severe and prolonged” economic crisis, causing a contraction of the economy by 4%  in 2009 and continuing trouble through at least 2010.
  • Fears abound that workers (the poor) will pay the brunt of the economic costs of the mandatory business shut-downs (El Universal)

The key take-away, in my opinion, is that a combined, tempered response that considers both short and long term objectives is important.  Some steps, such as the “renaming” of swine flu to Influenza A (H1N1), can address economic issues without affecting the health care response; others will require identifying the right balance of policies to stop the spread of disease without enacting draconian and unnecessary social shut-downs.  To stop the spread of a feared pandemic, quick action is essential.  However, to avoid economic harms, it is essential to act equally quickly to identify patients, provide health services, and then evaluate new evidence as it becomes available to the utility of the various response tools.  

The Mexican government did act quickly, in my opinion, to stop the virus, but by encouraging people to wear masks in public (a mostly futile gesture), they have caused significant damage to the tourism industry.  Similarly, as new reports regarding the mortality and contagiousness of Influenza A (H1N1) become available, the Mexican government should begin re-examining its response.  Time will tel if they have made the right choices.


México, D.F.


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