The economics of infectious diseases

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Title: The economics of infectious diseases
Authors: Hauck, KD
Item Type: Chapter
Abstract: Economics can make immensely valuable contributions to our understanding of infectious disease transmission and the design of effective policy responses. The one unique characteristic of infectious diseases makes it also particularly complicated to analyze: the fact that it is transmitted from person to person. It explains why individuals’ behavior and externalities are a central topic for the economics of infectious diseases. Many public health interventions are built on the assumption that individuals are altruistic and consider the benefits and costs of their actions to others. This would imply that even infected individuals demand prevention, which stands in conflict with the economic theory of rational behavior. Empirical evidence is conflicting for infected individuals. For healthy individuals, evidence suggests that the demand for prevention is affected by real or perceived risk of infection. However, studies are plagued by underreporting of preventive behavior and non-random selection into testing. Some empirical studies have shown that the impact of prevention interventions could be far greater than one case prevented, resulting in significant externalities. Therefore, economic evaluations need to build on dynamic transmission models in order to correctly estimate these externalities. Future research needs are significant. Economic research needs to improve our understanding of the role of human behavior in disease transmission; support the better integration of economic and epidemiological modeling, evaluation of large-scale public health interventions with quasi-experimental methods, design of optimal subsidies for tackling the global threat of antimicrobial resistance, refocusing the research agenda toward underresearched diseases; and most importantly to assure that progress translates into saved lives on the ground by advising on effective health system strengthening.
Editors: Jones, A
Issue Date: 30-Aug-2018
Publisher: Oxford University Press
Journal / Book Title: Oxford Research Encyclopedia of Economics and Finance
Copyright Statement: Copyright © 2019. All rights reserved. Oxford University Press. This material was originally published in Oxford Research Encyclopedia of Economics and Finance edited by Jonathan H. Hamilton, and has been reproduced by permission of Oxford University Press For permission to reuse this material, please visit
Sponsor/Funder: National Institute for Health Research
Department for International Development (UK) (DFI
Medical Research Council (MRC)
Funder's Grant Number: HPRU-2012-10080
Embargo Date: 2020-08-30
Online Publication Date: 2018-08-30
Appears in Collections:Faculty of Medicine
Epidemiology, Public Health and Primary Care

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