CREATE Study Predicts Greater Economic Loss from Influenza Pandemic Than Prior Estimates

By Emily Gersema

An influenza pandemic would cost the nation tens of billions of dollars in economic losses – nearly double what previous estimates showed, a new study shows.

Published on June 28 in Risk Analysis: An International Journal, the USC-led study found that the nation would lose as much as $45 billion in gross domestic product if Americans failed to get vaccinated for the flu, versus $34 billion if they were vaccinated.

GDP measures the size of nation’s economy.

“We’re on much more solid ground now with anticipating the potential losses from influenza and identifying factors that most affect them,” said Adam Rose, study team leader who is a research professor at the USC Center for Risk and Economic Analysis of Terrorism Events (CREATE) and in the Price School of Public Policy. “Flu seasons do result in deaths and economic loss, but once in a while, such as the Spanish flu of 1918, you have a season that really affects tens of millions of people.”

The new estimates differ significantly from prior studies’ because Rose and his fellow researchers used a new methodology that accounts for losses from several “avoidance behaviors” such as people choosing to shun movie theaters or sporting events to avoid infection. They also accounted for “resilience” the ways in which businesses offset the loss of workers such as through overtime or extra shifts.

Rose and other scientists already have used this methodology to estimate economic losses of terrorism events. It also can apply to other health threats such as the mosquito-borne Zika virus and natural disasters. Because it is more accurate than methods that are more limited in scope, governments, businesses and organizations can develop much better plans to anticipate and manage disaster.

Avoidance behaviors and resilience comprise a significant portion of potential economic losses. When the scientists omitted those factors from their calculation, they found that the influenza pandemic, if Americans vaccinated, would result in a $19 billion loss of GDP, versus $25 billion if they had included avoidance behaviors and resilience.

“Our study did three things beyond the standard that economists at public health institutions often do,” Rose said. “We looked at, in addition to health care costs, lost work days, avoidance behaviors and resilience, and then translated those into dollar terms.”

“It’s an expanded framework to take into account some things that have never been factored into these studies,” Rose added.

Other “avoidance behaviors” included in the study were: staying home from work, keeping children from school, reducing international and domestic travel, and decreasing public transportation use.

Scientists also estimated economic losses for two other scenarios during a typical flu season – one in which Americans were vaccinated and one in which they weren’t. Taking into account resilience and avoidance behaviors, the scientists estimated that a flu season normally results in a loss of $7 billion if Americans vaccinate, compared with $9 billion if they do not vaccinate.

The differences in costs reveal problems that could be targeted by policymakers to minimize losses.

“Attempting to influence avoidance behavior through public messaging and information campaigns, so-called ‘nudges,’ and other incentives may hold the potential for greatly reducing the economic costs of an influenza outbreak at a relatively low cost,” the scientists wrote.

The study was funded by the National Biosurveillance Integration Center of the U.S. Department of Homeland Security.

The study co-authors were USC CREATE and Price School affiliates Dan Wei and Fynnwin Prager, who also is with California State University at Dominguez Hills.