Ebola’s Effects on the Economy The Ebola virus is a deadly, contagious disease that spreads via contact with bodily fluids of someone who is infected and exhibiting symptoms. Since it’s introduction in 1976, the virus has resurfaced 14 times, the most recent being the outbreak in the West African countries. (Legrand et al., 2007) While the effects on the health of the general public are the most prevalent in society, Ebola also has several economic impacts: public paranoia, implementation of new public policy, and decreases population. Once Ebola spreads to a country, the general mentality of the public becomes paranoid that they are susceptible to the disease wherever they go. This fear of contagion can cause people to stop showing up for work altogether to avoid all risks of infection. This decrease in supply of labor leads to a decrease in output, or a decrease in the size of the production possibility frontier because the country does not have the labor capital to be as productive as it was before. A decrease in the PPF is reflected in a decrease in the gross domestic product of the country. The government suffers from this decrease in GDP because it is no longer receiving as much tax revenue as it was before because it has fewer goods to tax.
Another effect of this behavior aversion is a decreased demand of normal goods due to low expectations of income in the near future. The less people think they will earn in the future, the less they will spend now. This decrease in demand leads to a decrease in the quantity demanded which means that suppliers will lay off workers to offset price adjustments and avoid producing a surplus of goods.
Lastly, the widespread fear of Ebola will cause in increase in demand of food as a result of “shortages, panic buying, and speculation.” (Panzer, 2014) Consumers will start to buy more food because they think that it will be a scarce source soon. This increase in demand leads to an upward pressure of the price. An upward pressure on the prices of food will cause a certain a number of people to be unable to afford food, which can lead to more deaths due to malnutrition. As public conditions begin to deteriorate and the widespread fear Ebola engulfs the majority of the population, the government must step in to mitigate the effects of Ebola and preempt the disease from spreading any further. The government can quarantine its country to prevent any transmission of Ebola via trade, and it can spend money on its healthcare infrastructure to combat the disease.
Quarantine essentially locks all borders and prevents the country from importing or exporting any goods. The country’s PPF is now significantly smaller because it cannot specialize in goods it has comparative advantage in and trade with other countries to increase the total amount of products available. Because the country cannot export any goods, suppliers/manufacturers start laying off laborers because the demand is significantly less than it was before and they don’t need as much products now. The country’s gross domestic product also decreases as the export does. The lack of imports gives way to a shortage in food supply, which leads to an increase in the price of food. To further exacerbate the food shortage, some government policies prevent farmers from mobilizing to a new location, for fear of infection, in order to cultivate more of their crops.
In order to mitigate the effects of manipulating trade restrictions on certain countries, a joint commission including the World Health Organization and the World Trade Organization was proposed. Its responsibilities would include assessing, coordinating, and resolving conflicts wherever “global public health emergency measures…conflict with economic interests.”(Mackey & Liang, 2011) This would allow for decisions to be made in the best interests of both the economy and public health.
In conjunction with quarantine, the government spends money to control the disease and treat those who are infected. The costs of controlling an outbreak include “laboratory support and epidemiologic aid, administrative and clerical activities, and information and communication services,” and costs of treatments consist of “hospital and physician charges as well as drug use…” (Schwab, 1966) This often leads to a fiscal deficit because the government is spending more money on healthcare and earning less money from tax revenues due to the decrease in output from paranoid laborers or deceased ones.
The final effect of Ebola on an economy is a direct result of the sickness and death induced by the disease itself. Some might argue that the reduced workforce created as a result of the deaths of laborers can lead to an increase in wages paid to current laborers and an increased standard of living. After all, a decrease in supply gives way to a lower quantity demanded. This was the case after the 1918 influenza pandemic killed enough laborers to create a shortage. Nevertheless, “this is less likely than in 1918…given the greater mobility of workers that exists today.” (Garrett, 2007)
Some economic costs that often get overlooked in an event such as this Ebola outbreak the costs of education and human developmental expenses that the government spent on those who died. Although the countries in West Africa that were affected by Ebola were developing countries with no solid healthcare infrastructure, the cost still exists in a lower amount.
In conclusion, Ebola leads to aversion behavior in the public, which causes an increase in the prices of necessary items such as food and water, and a decrease in the production possibility frontier of the country. Ebola is usually accompanied by quarantine, a government policy to help stop the spread, which can lower the overall GDP of a country and raise unemployment and shortages in the country. In addition to government policy, the government also increases spending to combat healthcare but also has a decreased revenue stream due to the decrease in output and taxes paid. Lastly, a cost not usually recognized by most is the cost of education and human development spent on those who died. While Ebola’s effects on a country’s public health is clear, the effects on its economy often go unnoticed until the epidemic is finally over.

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