The Economics of Influenza

The word pandemics has caused much confusion during the recent crisis provoked by so-callled swine flu (A/H1N1). Alerted by the World Health Organization in June 2009 that pandemic contagion was in the making, the planet's inhabitants were left to wonder how many victims the influenza would take. In fact, the etymology of the word pandemic refers to an epidemic potentially able to spread its contagion across all peoples in all continents. The historical record provides no comfort. In Italy, the 1347-49 Black Plague killed between 30% and 60% of the population. The 1630 bubonic plague portrayed by Manzoni in The Betrothed killed two million people in the Northern part of the peninsula only. The relatively benign 1918 influenza, now used as reference for the worst-case scenario of influenza pandemic, caused 300-400,000 deaths. What was to be expected from swine flu, then? Immediately after the alarm, people scrambled to stock up antivirals or organized swine flu parties to get immunization before the presumed breakdown of the health care system. In the end, the final death count did not go beyond a few hundred victims in Italy: less than those caused each year by the common winter flu. In fact, pandemic does not mean high mortality, but rather high diffusion of a disease. In this sense, the swine flu was really pandemic, with 7 million cases between July 2009 and July 2010 only, mostly caused by the A/H1N1 virus. However, after the experience of last year, there is debate about the appropriateness of grouping lethal and non-lethal diseases in the same category. Separating them could avoid spreading unjustified alarm, which sows panic among the population and damages the economy. If the last pandemic had a radically different demographic impact with respect to medieval plagues, the same can be said about economic impact. The black plague caused a paralysis in economic activity and permanently altered ownership structures and economic mindsets; it sharply increased levels of inequality. It also a had a somewhat positive effect, insofar as it increased per capita resources. But even discounting these countervailing effects, the huge drop in economic activity is nowhere comparable with that caused by the pig flu.

However, if we look at the amount of resources invested by health authorities and governments to face global pandemic threats, and we compare it with the real level of risk faced by each individual during the crisis, the swine pandemic stands out for the enormity of invested resources with respect to a risk which turned out to be modest. True, influenzas are unpredictable and caution was certainly recommended. But the larger question of assessing, especially in times when the economy is not florid like today, whether existing national and international intervention strategies are economically sustainable remains open.