Sunday, May 03, 2009

Epidemics: making money, and losing it

Already, people are making money from the "swine flu" epidemic - both the nefarious and the opportunity-grabbers.

This is to be expected in a capitalistic world. You try to make money at the margins of opportunity. In this case, those margins are a) the fears of a population mass, and b) the attention of a population mass, respectively.

If I was superstitious, I'd be concerned that the first Australian case of this flu was a man who comes from just down the road (Coogee), and who contracted it from a holiday in Puerto Escondido, Mexico - where I too have holidayed. But I'm not superstitious.

It reminds me of the near-hysteria of the SARS epidemic six years ago. Epicentre Honk Kong, which contains a good mass of superstitious people. I told my colleague from Hong Kong that a good way to make money would be to market a potion claiming to prevent SARS, guaranteeing to pay a penalty compensation if it didn't work. You'd make your money from the large numbers sold, as against the small number of purchasers who subsequently contracted the illness.

Sure enough, a few weeks later a Hong Kong business was marketing a soft drink claiming to prevent SARS - or your money back (not even a penal return promised).

Efforts of the World Health Organisation are credited with breaking the back of SARS - which is why WHO has reacted so strongly to this Mexican outbreak. Still, my feeling has been that this is over-reaction, particularly since the number of fatalities has been small - and revised down - and has so far been confined to Mexicans (one of which was resident in the US).

SARS was far more virilent - the death rate was higher. I can't help wondering whether the main outcome of this current epidemic will be reduced economic activity - and a small prolonging of the current global recession.

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