Infectious Disease Control and Human Health Investment: Learning by Controlling

Abstract

ABSTRACT This article develops a model that allows for two-way interaction between infectious disease dynamics and economic dynamics. The motivating application is the 2014 Ebola Virus Disease (EVD) outbreak in West Africa, where purposeful investments in disease control played an important role. The authors, therefore, unlike other papers in the literature, model two types of investments: investments in general health and investments in disease control. Investments in disease control lead to learning by controlling, which reduces the transmission rate of the disease. Model simulations show that an endemic disease can have dramatic negative effects on population and output. Importantly, allowing for disease-control investments ameliorates these effects without crowding out consumption and general health investments. Moreover, the simulations varying the discount factor suggest that societies with substantial disease burdens are likely to prefer leaders and planners who are more impatient and therefore more willing to strongly invest in disease control. The model can help analyze the economic impacts of disease, guide disease preparedness, and responsiveness, and develop public health policies in countries that are severely and recurrently affected by infectious diseases.