The World Bank has stated that it estimates that Zika will cost the world $3.5 billion dollars in 2016. Although as of June 2016 there have only been 341 confirmed cases of Zika among pregnant women in the US, there are more than a million people who are infected in Brazil.
What factors go into calculating the cost of an enormous, widespread virus that also has many externalities on the economy, and how is this calculation done? The methods of putting a price tag on an epidemic involve extrapolation, history, statistics, science, and many other methods. The first piece of the puzzle stems from calculating the overall cost of fighting the actual disease, which primarily includes the costs of doctors, drugs, and treatments. Much of this fight against the virus in Brazil is now coming from their army, who is trying to control the actual mosquitos from multiplying.
Another factor is the loss of productivity, accounting for those whose infection is affecting their ability to work. It is estimated that 750,000 people in Latin American and the Caribbean would lose one week of paid work, since roughly 20 percent of the infected get sick.
In addition to loss of productivity, Zika will affect the future population’s productive abilities. This is due to the side effects of the virus, primarily microcephaly, which is a birth defect in which the baby has a disproportionately small head and an underdeveloped brain.
Economies of infected areas tend to plummet due to disease avoidance, which is positively correlated with the tourism economy. For example the marketing and sales team behind 2016 Olympics over estimated how many people would come and stimulate the economy in Brazil, but due to the disease numbers were at a stagnant low in such a fragile economy.
There is no way of avoiding any part of this large equation. The numbers show that epidemics such as these can exponentially escalate to even higher ticket prices if they are not fought quickly.
I also wonder how the cost of long term care for large numbers of individuals born with microcephaly and it’s related brain defects will affect the economy as I assume it causes mental and physical disabilities that would require ongoing health care or other forms of support. Interesting topic!