The Economics of Epidemic Disease

Nicola Dimitri
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Nicola Dimitri: Faculty of Economics University of Siena, Siena-Italy. Visiting Professor IMT Lucca, Lucca-Italy. Research Associate Maastricht School of Management, Maastricht-NL

No 2012/51, Working Papers from Maastricht School of Management

Abstract: Epidemic, infectious, diseases are a major concern worldwide. Globalization, easy transportation, increased population and climate change all can contribute to their diffusion and persistence in large communities. Based on established knowledge on epidemic diffusion processes, the paper poses the following question. Suppose there is an outbreak of an infection and that health authorities in charge have a financial budget to fight the disease. How should they optimally employ such resources? Should they be invested to find a new treatment, if not yet available, or to prevent contagion, or both? By considering some very simple, probabilistic, and deterministic, epidemic models, the paper tries to provide some early insights on the issue. The main message of the work is that the nature of the epidemic process, as well as the budget and the cost to control the parameters driving the epidemics, will determine the optimal allocation of resources.

Pages: 17 pages
Date: 2012-11
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http://web2.msm.nl/RePEc/msm/wpaper/MSM-WP2012-51.pdf First version, 2012 (application/pdf)

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