The Inclusive Cost of Pandemic Influenza Risk
THE INCLUSIVE COST OF PANDEMIC INFLUENZA RISK by Victoria Y. Fan, Dean T. Jamison, and Lawrence H. Summers. NBER Working Paper 22137, March 2016.
The authors find that global pandemic flu risk is $570 billion per year. This is the expected annual value of impact, and is the amount that should inform judgements about the adequacy of risk-reducing measures and expenditures on core public health system capacities. The authors show that the risk of $570 billion is predominantly due to (a) intrinsic (subjective) mortality costs ($490 billion per year) , rather than (b) income losses ($80 billion per year).
The Global Health Risk Framework (GHRF) report (January 2016) by the National Academy of Medicine (NAM) Commission, used an expected value of income losses of $60 billion per year (i.e., corresponding to the $80 billion in (b)). The NAM Commission's business case for robust veterinary and human public health systems was based on the conservative risk calculations in the World Bank's seminal "People, Pathogens and Our Planet : the Economics of One Health" (2012). This report used expected impact of a severe flu pandemic of 4.8% of GDP and 1% probability of occurrence in any year. The resulting expected annual value (i.e. the risk), is now $52 billion (based on PPP GDP in 2014). The expected rate of return on sustained expenditures on veterinary and human public health systems (so they perform core public health functions to established standards) was 123% annually in the “Economics of One Health” report.
See the attached paper below.