Modelling the Economic Impacts of Epidemics in Developing Countries Under Alternative Intervention Strategies

Modern levels of global travel have intensified the risk of new infectious diseases becoming pandemics. Particularly at risk are developing countries whose health systems may be less well equipped to detect quickly and respond effectively to the importation of new infectious diseases. This chapter examines what might have been the economic consequences if the 2014 West African Ebola epidemic had been imported to a small Asia-Pacific country. Hypothetical outbreaks in two countries were modelled. The post-importation estimations were carried out with two linked models: a stochastic disease transmission (SEIR) model and a quarterly version of the multi-country GTAP model, GTAP-Q. The SEIR model provided daily estimates of the number of persons in various disease states. For each intervention strategy the stochastic disease model was run 500 times to obtain the probability distribution of disease outcomes. Typical daily country outcomes for both controlled and uncontrolled outbreaks under five alternative intervention strategies were converted to quarterly disease-state results, which in turn were used in the estimation of GTAP-Q shocks to country-specific health costs and labour productivity during the outbreak, and permanent reductions in each country’s population and labour force due to mortality. Estimated behavioural consequences (severe reductions in international tourism and crowd avoidance) formed further shocks. The GTAP-Q simulations revealed very large economic costs for each country if they experienced an uncontrolled Ebola outbreak, and considerable economic costs for controlled outbreaks in Fiji due to the importance of the tourism sector to its economy. A major finding was that purely reactive strategies had virtually no effect on preventing uncontrolled outbreaks, but pre-emptive strategies substantially reduced the proportion of uncontrolled outbreaks, and in turn the economic and social costs.