In-Flew-Enza: Pandemic Influenza and Its Security Implications - Innovation in Global Health Governance - page 136

data: the relationship between the costs inflicted at the micro level and those on the
society in aggregate can vary considerably across epidemics. a disease that kills
the weak and the very young can even have the perverse effect of raising the
GDP per capita, provided that those at the most productive ages survive but
there are fewer people in total to share the wealth ('epidemics and economics:
the economic consequences of Disease' 2003). this provides yet another
reason to explore the nature of a forthcoming pandemic. to be sure, each
influenza outbreak is different and it is not possible to predict what groups will
be at highest risk (Simonsen et al. 2005). Given the broad similarity between
the 1918 virus and the H5n1 virus, however, the pandemic influenza is
expected to be different from a typical influenza that strikes hardest among the
elderly, the very young, and people with underlying chronic conditions. Instead,
the pattern of the pandemic-induced population shock is likely to take a 'w' shape
because of its devastating impact on the economically active population in addition
to the very young and the elderly. 5 In the latter case, half of those killed in the
pandemic could be between the ages of 18 and 40 (osterholm 2005).
the sickness and premature deaths of income earners have important implications
for economy at the micro level. Disease-associated medical costs and the value of
workdays lost due to the illness reduce the disposable income for households. as
savings are replaced with current expenditures, the rate of capital accumulation
(savings and investment) declines. the more lethal and contagious the virus, the
more bread earners will get sick or die, and the higher the number of households
that will be pushed below the poverty line. the pandemic thus reinforces income
inequality, since poorer households bear a much greater economic burden as a result
of infection than their wealthier counterparts. as demonstrated in the HIv/aIDS
pandemic, because of the loss of family members and sales of assets to pay healthcare
costs, many poor households may never recover their initial income (cohen 1997).
For firms, the reduction in labour due to incapacity and mortality would increase
wage and replacement costs, forcing many to increase the prices of their products.
Likewise, the costs inflicted upon individual households and firms will contribute
to economic shocks at a macro level. like SARS, the influenza pandemic will affect
consumer confidence and alter consumption and social patterns. Yet unlike SARS,
where the main impact was on the demand side (Fan 2003), an influenza pandemic
will cause supply shocks by affecting the health of the labour force. research
suggests that if 25 percent or more of a population is infected, fuel and food supplies
will be significantly reduced, which will deal a serious blow to the economy unless
effective measures are taken to maintain basic services with a reduced labour force
(coulombier and ekdahl 2005). the U.S. Homeland Security council (2005, 13)
predicts that at the peak of an influenza pandemic as many as 40 percent of workers
in U.S. firms could be absent, including those who are sick, people who need to care
for others, and people who stay home because of safety concerns.
Depending on the epidemiological features and the psychological impact of the
pandemic, the demand and supply shocks will vary. In general, the more pathogenic
and contagious of the virus, the greater the supply shock (due to higher level of