Influenza Futures Markets: Accurate but 'Taboo'
You know about the futures markets for things like soy beans, coffee and orange juice, but what about the markets for swine flu, bird flu and SARS? Earlier this month, The Faculty Lounge blog wrote about the influenza futures now being traded on the Iowa Electronic Markets, which is run by Iowa University’s Henry B. Tippie College of Business.
The goal of the IEM's new H1N1 flu market is to have hundreds of medical professionals and scientists trade a range of swine flu futures contracts to "build a practitioner-level prediction of how the virus would spread, its severity and duration." IEM has operated flu futures markets since 2004 and ran a bird flu market last year. Financial Times reports that since the swine flu market was set up in May of this year, it has accurately predicted how fast the virus would spread and the mortality rate. It is now predicting a 70 percent likelihood that there will not be enough H1N1 vaccine available to hit government targets until at least December, and a a more than 90 percent probability that more than half of U.S. flu cases this season will be swine flu.
The Faculty Lounge notes that despite the possible benefits of accurate predictions by such futures markets, they remain "taboo." TFL writes that
Many readers will recall, for example, that in 2003 the Pentagon proposed a terrorism futures market, but withdrew the plan after it generated national outrage. Barbara Boxer, for example, said of the program "there is something very sick about it,” while Hillary Rodham Clinton, then a U.S. senator, said it would be “a futures market in death.”
Similarly, the negative reaction that came in 2003 when Tippie considered a SARS futures market in collaboration with federal agencies required IEM to set up the market backed by foundation grants instead. The FT notes that US health authorities have refused to collaborate on IEM's current flu futures market efforts, despite the fact that the Centers for Disease Control and Prevention had helped IEM establish a syphilis futures market just last year.
Posted by Bruce Carton on November 17, 2009 at 02:50 PM | Permalink
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