How Overblown Ebola Panic Could End Up Costing Billions

[madokie]

Fear is even more expensive than medical costs.

According to a recent Gallup poll, nearly a quarter of Americans are worried about catching Ebola, despite the fact that their chances of actually getting it are vanishingly small at this point. A recent Washington Post-ABC News poll indicated that two-thirds of Americans were worried about an Ebola epidemic in the US.

When people start freaking out about something like Ebola, predictable things happen. They start doing what social researchers call “cocooning.” They don’t travel or go on vacation. They don’t go out to restaurants as much. They may disrupt their work routine or insist that schools be closed.

The fear may be wildly out of proportion to the actual threat of the disease, certainly here in the U.S., but fear comes with its own threat, and Ebola panic is worse than that of past pandemic concerns. So far, it looks like American consumer sentiment has not been affected, and October reports show that excitement over cheap gasoline is trumping Ebola panic. But that could change. If you look at what happened in Hong Kong during the SARS outbreak in 2003, you find that retail sales plunged 10 percent. All told, SARS cost Hong Kong an estimated 2.6 percentage points in terms of GDP. In places like Lagos, Nigeria, shopping centers have already seen a drop of up to 40 percent in sales, even though Ebola has been contained so far in that country.

If you own any stocks, Ebola has likely already hit you in the wallet. Shares of airline stocks like United and American have dropped as investors get nervous about the possibility of travel bans for airlines from West Africa to Europe and the U.S.

http://www.alternet.org/economy/how-overblown-ebola-panic-could-end-costing-billions

[pnwmom]

1. And failing to act strongly and expeditiously to contain it will cost us even more.

I wish the CDC and Texas hospital had reacted with more caution, not less.

[bananas]

2. That's a good example of "the empiricism of the idiots."

http://www.democraticunderground.com/10025692019

More specifically, Taleb explained to
Business Insider that many people
talking about the disease don't "have a
grasp of the severity of the
multiplicative process."

The argument that the US should be
more worried about a disease like
cancer — which has more stable rates
of infection than Ebola does currently —
is a logic that Taleb calls "the
empiricism of the idiots."

The basic idea: The growth of Ebola
infection is nonlinear, so the number of
people catching it doubles every 20
days. Because of this, you have to act
quickly at the source of infections, he
says. "The closer you are to the source,
the more effective you are at slowing it
down ... it is much more rational to
prevent it now than later."

...

"If you have to overreact about
something, this is the place to
overreact," he said.