The economics of Ebola
Are Western countries likely to be safe from contagion?
The response of Western governments has been vastly insufficient to contain the outbreak, according to the World Bank and Medecins Sans Frontieres. Governments have provided too few military and health professionals, and little funding.
In response to pressure, Australia has recently provided A$20 million for a 100-bed hospital in Sierra Leone, but no medical personnel. This suggests the Australian government believes Ebola will be largely restricted to West Africa. Applying economic theory can assess whether this is correct.
This belief seems to rest on two pillars: first, that the risk of contagion is low for informed individuals because transmission is through bodily fluids; and, second, that some combination of reduced travel to West Africa and the quarantine of at-risk returnees will be effective.
The first belief seems reasonable if there are a small number of cases. By taking extreme precautions about touching others, the spread of the disease may be halted. However, as the number of unidentified cases in the population expands, public places become a potential risk.
It is daunting to consider that at the critical stage of the illness, patients lose five to ten liters of contagious fluids per day. Beyond a small number of cases, hospitals’ capacity to safely dispose of these fluids could easily be overwhelmed. The Emory University hospital treating three Ebola patients had to use an autoclave to sterilize 1,360 kilograms of medical waste.
Biologists say mass contagion is unlikely in the West. However, they have serious concerns about India and China with their dense populations and poor public health systems.
U.S. Centers for Disease Control and Prevention director Thomas Frieden says: “We have got infection control in hospitals and public health that tracks and isolates people if they get symptoms.“ However, this view may be overlooking the incentives driving at-risk individuals.
Individual self-interest in conflict with society’s interests
While it is in society’s interest for individuals to declare any contact with Ebola, it is not in the individual’s interest. Thomas Duncan, who died in Texas from Ebola, did not disclose his contact with a sick patient to Liberian authorities. An individual’s freedom of travel may be severely curtailed.
Australia and the United States have already implemented home quarantine orders for at-risk individuals. However, at least one person has refused to comply. If the individual is identified while in a country with low-budget quarantine procedures, they may be around other at-risk individuals, which is certainly not in their interest.
Individuals are also unlikely to respect any travel ban. Modelling by Northeastern University suggests that a 90 percent reduction in flights to West Africa would delay the spread by only a few months. Individuals will enter through other countries, meaning they will be harder to track and isolate.
Based on cost-benefit analysis, the potential costs of Ebola spreading are extremely high and the risks may be much higher than they are currently portrayed. Voters and donors should support greater efforts to end Ebola in West Africa. As International Monetary Fund director Christine Lagarde says, “real action” is needed to counter the outbreak. Without such action Ebola places the global economy at risk.
Catherine de Fontenay is Associate Professor at Melbourne Business School. This story is published courtesy of The Conversation (under Creative Commons-Attribution/No derivatives).
