Health economist Martin Meltzer of the US Centers for Disease Control and Prevention says depending on the severity of the strain an influenza pandemic's cost would range between tens of billions and trillions of dollars.
According to a 1999 study by Meltzer and colleagues, a flu pandemic where 35% of people are attacked by the virus would cost the US alone a total of $166 billion. A milder 1968-like pandemic, with only a 15% attack rate, would cost the US $71 billion. He notes that these are “conservative” estimates and do not account for work days lost due to panic or parents staying home with their children because schools are shut.
However, he points to a recent study by an Australian economist which models the impacts of scenarios from mild to an “ultra-1918” type pandemic. In this worst case scenario, the cost to the world could run into trillions of dollars.
Ideally if one could estimate the probability of each type of pandemic then could multiply that probability times the total estimated cost to get a sense of the value to be gained from developing methods to stop or decrease the severity of a pandemic. But for a repeat of the 1918 severity pandemic or something even more deadly it is hard to come up with a reasonable probability for its occurrence.
Meltzer compares bird flu to the SARS outbreak that encompassed a much smaller number of companies and thinks once the pandemic passes the economy will recover very rapidly.
The biggest impact of an influenza pandemic, which would likely last less than four months depending on the size of the countries affected, would probably hit growth for just one to two quarters, Meltzer said.
"After that, I expect to see a great rebound," he said. "People will return and we will see normal growth rates."
A more lethal strain would leave more lasting effects because it would shrink the population and cause decreased demand for housing. Plus, the problem of handling so many wills and estates would slow the changing of ownership of assets of the deceased.
The World Bank has estimated a yearlong flu pandemic would cost the world economy US$800 billion. That's nearly 27 times the cost of SARS, which was estimated at US$30 billion, according to the World Health Organization.
Anyone know what sort of flu strain they assumed in their model?