Micro-Economic Approaches to Evaluating the Burden of Malaria
CID Faculty Working Paper No. 99
The links between malaria and poverty are both obvious and subtle. While the correlation between the two is apparent, directions and mechanisms of causation are less so, and different methodological approaches to understanding the relationship provide widely divergent perspectives on the impact of the disease. Recent macroeconomic studies have suggested that in highly malarious countries the disease may be responsible for reducing economic growth by up to 1.3 percentage points a year. This methodology, however, functions independently of the chains of causation and cannot shed much light on underlying mechanisms. Micro-economic studies, which aggregate the cost per case to households, find a much smaller impact, generally less than one percent of per capita GDP. The traditional cost-of-illness methodology, which forms the basis of most of these studies, however, was designed to study illnesses that represent a far smaller disease burden. The pandemic nature of malaria presents economic costs that the traditional model is simply not able to capture. The paper explores the difference between the results of the different methodological approaches, examining some of the mechanisms through which malaria can affect long-term economic growth and development, and expands the cost-of-illness methodology to incorporate these effects.
Keywords: malaria, economic cost of disease, burden of disease, cost of illness
JEL subject codes: I12, B40