Carey Researchers Weigh In on Zika’s Economic Impact

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Researchers from the Johns Hopkins Carey Business School estimate that the social and economic cost of the recent Zika virus outbreak in Latin America and the Caribbean could cost countries in the region an estimated $7 billion to $18 billion from 2015 to 2017. Their findings are included in a new report “A Socio-economic impact assessment of Zika virus in Latin America and the Caribbean: with a focus on Brazil, Colombia and Suriname issued by the United Nations Development Programme (UNDP) and the International Federation of Red Cross and Red Crescent Societies (IFRC). The report was produced in collaboration with the ISGlobal, the Barcelona Institute for Global Health, and presented to the United Nations on April 6, 2017.

The Zika virus is transmitted to humans by mosquitos and has been linked to the birth defect microcephaly, a condition in which babies are born with smaller than expected heads and brains. The disease is also associated with a pattern of birth defects known as “congenital Zika syndrome,” which can include severe microcephaly, vision and hearing problems, and other symptoms. Since 2014, Zika has spread rapidly throughout Latin America and the Caribbean, as well as parts of the U.S., Asia, and Africa. In early 2016, the World Health Organization (WHO) declared Zika a “Public Health Emergency of International Concern.”

The WHO estimated that as many as 4 million infected people in Latin America and the Caribbean could have been infected by early 2017. Worldwide, those estimates could be as high as 80 to 117 million people infected and as many as 1.5 million pregnant women infected globally.

For the study, Carey Associate Professor Mario Macis (right) and Assistant Professor Emilia Simeonova (below right) conducted a ”rapid assessment” analysis of macroeconomic costs for Latin American and the Caribbean nations based on existing data on the incidence and transmission of Zika virus. Macis and Simeonova based their calculations on three estimated rates of transmission, current, medium, and high. The overall cost of the epidemic included the cost of direct treatment and care, as well as the cost of lost revenue and productivity.

According to the study, the epidemic could cost between $7 and $18 billion in the short term, which equates to an average of $1 billion in costs for every five percent rise in infection rate. The magnitude of the estimated economic cost of the epidemic varies considerably across the three infection scenarios: baseline $7 billion; medium $9 billion; and high $18 billion over the entire region.

The long-term cost of Zika on the region was also estimated to be substantial due to the direct and indirect costs associated with microcephaly and Guillain-Barre syndrome. Overall, the total direct and indirect lifetime cost of microcephaly cases caused by Zika could exceed $3 billion in the most optimistic scenario and $29 billion in the worst-case Zika scenario. The corresponding lifetime costs of Guillain-Barre syndrome cases are estimated to be between $242 million and $10 billion.

“The Zika epidemic will have both significant short-term and long-term economic impact. Even in the least pessimistic scenarios, we estimate the costs could be as high as $7-$9 billion, which is a large amount, particularly when we consider that the countries affected are low- and middle-income countries” said Macis, an author of the report. “This outbreak will be expensive, but it is very hard to predict the true cost, because we do not know how widespread the disease will be, and there is still considerable uncertainty about the frequency of microcephaly, Guillain-Barre and other consequences of Zika.” According to Macis, some recent estimates suggest that the rate of microcephaly from Zika infection could reach 10 percent, which is a much higher rate than that considered in the UNDP study.

“There is a paucity of research on the costs associated with the Zika virus. For example there are no studies on the effects on tourism revenues. The global community really needs to come together to better understand this problem,” said Simeonova, co-author of the study. “More information is needed to understand transmission rates and other outcomes. More information will help us in making better estimates, which in turn would helo the affected countries to budget appropriately.”

Posted on May 4, 2017 In MS in Health Care Management, Global MBA, MBA/Masters of Public Health, Faculty Story, News Item, Research Story, Alumni, Current Students, Faculty, International Students, New Students, Partners, Prospective Students, Staff