Globalization and disease: the case of SARS

Abstract

Introduction: The purpose of this paper is to provide an assessment of the global economic impacts of the SARS disease. We update our estimates from the earlier version of this paper dated May 2003, with final information on the number of SARS cases and the knowledge that the SARS epidemic lasted approximately 6 months rather than the full year originally assumed. Our empirical estimates of the economic effects of the SARS epidemic are based on a global model called the G-cubed (Asia-Pacific) Model. Most previous studies on the economic effects of epidemics focus on the economic costs involving the disease-associated medical costs or forgone incomes as a result of the disease-related morbidity and mortality. However, the direct consequences of the SARS epidemic in terms of medical expenditures or demographic effects seem to be rather small, in particular compared to other major epidemics such as HIV/AIDS or malaria. A few recent studies including Chou, Kuo and Peng (2003), Siu and Wong (2003), and Wen (2003) provide some estimates for the economic effects of SARS on individual Asian countries such as China, Hong Kong, and Taiwan. But, these studies focus mostly on assessing the damages by SARS in affected industries such as tourism and retail service sector.