On SARS type economic effects during infectious disease outbreaks
AbstractInfectious disease outbreaks can exact a high human and economic cost through illness and death. But, as with severe acute respiratory syndrome (SARS) in East Asia in 2003, or the plague outbreak in Surat, India, in 1994, they can also create severe economic disruptions even when there is, ultimately, relatively little illness or death. Such disruptions are commonly the result of uncoordinated and panicky efforts by individuals to avoid becoming infected, of preventive activity. This paper places these"SARS type"effects in the context of research on economic epidemiology, in which behavioral responses to disease risk have both economic and epidemiological consequences. The paper looks in particular at how people form subjective probability judgments about disease risk. Public opinion surveys during the SARS outbreak provide suggestive evidence that people did indeed at times hold excessively high perceptions of the risk of becoming infected, or, if infected, of dying from the disease. The paper discusses research in behavioral economics and the theory of information cascades that may shed light on the origin of such biases. The authors consider whether public information strategies can help reduce unwarranted panic. A preliminary question is why governments often seem to have strong incentives to conceal information about infectious disease outbreaks. The paper reviews recent game-theoretic analysis that clarifies government incentives. An important finding is that government incentives to conceal decline the more numerous are non-official sources of information about a possible disease outbreak. The findings suggest that honesty may indeed be the best public policy under modern conditions of easy mass global communications.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 4466.
Date of creation: 01 Jan 2008
Date of revision:
Health Monitoring&Evaluation; Disease Control&Prevention; Population Policies; Hazard Risk Management; Gender and Health;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-01-19 (All new papers)
- NEP-CWA-2008-01-19 (Central & Western Asia)
- NEP-DEV-2008-01-19 (Development)
- NEP-HEA-2008-01-19 (Health Economics)
- NEP-SEA-2008-01-19 (South East Asia)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gale, Douglas, 1996. "What have we learned from social learning?," European Economic Review, Elsevier, vol. 40(3-5), pages 617-628, April.
- Emily Oster, 2007. "HIV and Sexual Behavior Change: Why Not Africa?," NBER Working Papers 13049, National Bureau of Economic Research, Inc.
- Mark Gersovitz & Jeffrey S. Hammer, 2004.
"The Economical Control of Infectious Diseases,"
Royal Economic Society, vol. 114(492), pages 1-27, 01.
- Avery, Christopher & Zemsky, Peter, 1998. "Multidimensional Uncertainty and Herd Behavior in Financial Markets," American Economic Review, American Economic Association, vol. 88(4), pages 724-48, September.
- Philipson, Tomas, 2000.
"Economic epidemiology and infectious diseases,"
Handbook of Health Economics,
in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 33, pages 1761-1799
- Jin-Tan Liu & James K. Hammitt & Jung-Der Wang & Meng-Wen Tsou, 2003.
"Valuation of the Risk of SARS in Taiwan,"
NBER Working Papers
10011, National Bureau of Economic Research, Inc.
- Richard G. Frank, 2004. "Behavioral Economics and Health Economics," NBER Working Papers 10881, National Bureau of Economic Research, Inc.
- Alan D. Lopez & Colin D. Mathers & Majid Ezzati & Dean T. Jamison & Christopher J. L. Murray, 2006. "Global Burden of Disease and Risk Factors," World Bank Publications, The World Bank, number 7039.
- Bryan Caplan, 2000. "Rational Irrationality: A Framework for the Neoclassical-Behavioral Debate," Eastern Economic Journal, Eastern Economic Association, vol. 26(2), pages 191-211, Spring.
- Kremer, Michael, 1996. "Integrating Behavioral Choice into Epidemiological Models of AIDS," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 549-73, May.
- Edoardo Gaffeo, 2003. "The Economics of HIV/AIDS: A Survey," Development Policy Review, Overseas Development Institute, vol. 21(1), pages 27-49, 01.
- Sushil Bikhchandani & David Hirshleifer & Ivo Welch, 1998. "Learning from the Behavior of Others: Conformity, Fads, and Informational Cascades," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 151-170, Summer.
- Warwick McKibbin & Alexandra Sidorenko, 2006. "Global Macroeconomic Consequences of Pandemic Influenza," CAMA Working Papers 2006-26, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).
If references are entirely missing, you can add them using this form.