Income gain

Evaluation of preventive health policies can be conducted on the basis of health sector impacts (i.e. in terms of health gains and reductions to health system expenditure), but also in terms of the impact of interventions on wider society — including improvements to workforce productivity, and mitigation of income lost due to disease affliction. It is well known that health shocks adversely impact labour force participation, individual income, and productivity, and a proportion of these negative impacts can be recovered by interventions that reduce disease incidence or fatality.

Methodology

Each year within the simulation model, for a selected target_disease, the population is divided into four buckets by disease phase:

1. Healthy: those who do not have the disease
2. Incident phase: those who have contracted the disease in the current year
3. Medial phase: those who have contracted the disease in a prior year
4. Death phase: those who will die from the disease in the current year

Each disease phase is associated with an estimation of income loss, which varies between diseases to reflect differences in the extent to which diseases inhibit individual workforce participation and productivity. Income loss estimates also vary by sex and age.

Each year within the simulation model, individuals move between disease phases depending on incidence and fatality rates for a given disease. Total income is estimated as the sum of the income loss implied by the proportions of the target population in each of the three disease phases.