n. The negative impact of fear and anxiety on economic activity; the use of fear to sell products and services.
Acting on the lessons learned from previous outbreaks, domestic and global actors are well prepared to deal with an outbreak of Nipah virus in India. But they fail to recognize the impact of downstream "fearonomic effects"—the economic consequences resulting from hysteria outbreaks, and propelled by misinformation—that lead to irrational decision-making on the part of both individuals and states.
Here’s a fearonomics snapshot: Halloween spending has risen from $3.3 billion in 2005 to $6.9 billion in 2015, according to the NRF.
With many outbreaks, especially of highly fatal diseases such as Ebola, fear is the biggest demon. This fear has led to the crippling of economies of Ebola-affected countries. This fear has cost Sierra Leone, Guinea, and Liberia 12 % of their GDP in foregone income and unraveled the years of progress made by these countries.
I think Avinash Kaushik was right on target when he mentioned the HIPPO (Highest Paid Person's Opinion) in the room. If the HIPPO is fearful of the unknown and co-workers are fearful of the HIPPO. You've got trickle-down-fearonomics and hence, status quo.
One big lesson learned is the need to prevent panic during a public health emergency. The new phrase is to "fear-guard" a country. During many disease outbreaks, say experts, a “pandemic of fear” can be more devastating to a society and an economy than the disease itself.