Does flu season impact the economy, in addition to our personal health?
We’ve all experienced it before, many times: our energy is suddenly zapped, we have headaches, associated body aches, fever, chills, and a hacking cough. Unlike the common cold which can take days to incubate, influenza tends to manifest itself relatively quickly.
However, although we generally lump the two together, the flu is substantially more serious. In the United States, about 36,000 people die after contracting influenza every year, although that number varies significantly from year-to-year. Over a 31-year period between 1976 and 2007, the low was about 3,000 and the high approximately 49,000. In an extreme example, about 675,000 Americans were killed by the worldwide Spanish flu pandemic of 1918-19.
What tends to be underplayed are the economic costs associated with the flu each year. Intuitively, we understand that they are probably substantial, but how substantial? To answer that question, we need to look at the costs of the flu from both the microeconomics and macroeconomics perspectives. But first, let’s differentiate between the two.
According to Investopedia, the exact definition of microeconomics is as follows:
“The branch of economics that analyzes the market behavior of individual consumers and firms in an attempt to understand the decision-making process of firms and households. It is concerned with the interaction between individual buyers and sellers and the factors that influence the choices made by buyers and sellers. In particular, microeconomics focuses on patterns of supply and demand and the determination of price and output in individual markets (e.g. coffee industry).”
Investopedia further defines macroeconomics as follows:
“The field of economics that studies the behavior of the aggregate economy. Macroeconomics examines economy-wide phenomena such as changes in unemployment, national income, rate of growth, gross domestic product, inflation and price levels.”
This discipline is essentially the combination of all microeconomics forces and interactions. Instead of focusing on the individual consumer, it quantifies behavior and data in the aggregate. Most statistics reported by the media with respect to the economy are macroeconomics in nature.
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