Can the ‘Wisdom of Crowds’ Predict a Flu Pandemic?

March 3, 2007

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This is clever:

The University of Iowa on Thursday unveiled an electronic market that asks about 100 physicians, nurses, epidemiologists, researchers and public health officials to predict when, where or if an avian flu pandemic will spread around the world, the Des Moines Register reports (Jordan, Des Moines Register, 3/1).

The Iowa Health Prediction Market will put a $245,000 grant from the Robert Wood Johnson Foundation toward creating the Avian Flu Market using the not-for-profit Program for Monitoring Emerging Diseases — the International Society of Infectious Diseases’ online global reporting system (Fox, Reuters/Yahoo! News, 3/1).

The Des Moines Register gives further detail:

– About 100 doctors, nurses, epidemiologists, researchers and public health officials from around the world will act as traders in the market by gathering information and making predictions.

– Traders buy or sell shares based on their answers to yes/no questions that include whether the H5N1 virus will appear in North or South America by July 1, whether more than 300 cases of H5N1 are confirmed worldwide by July 1, and whether there is any human-to-human spread of the virus by July 1.

– Traders can invest all their money – each member has $100 in an account provided by the U of I – in a popular answer or buy cheaper shares in a less-likely scenario to increase the possible payout. When the market closes July 1, administrators will credit traders according to the accuracy of their predictions.

Traders will be recruited through the Program for Monitoring Emerging Diseases, an online global reporting system run by the International Society for Infectious Diseases that rapidly distributes information about outbreaks.

The Avian Flu Market and the U of I’s Influenza Prediction Market, which has successfully predicted when the flu bug would hit Iowa, are spinoffs of the Iowa Electronic Markets, which have gained national attention for accurate predictions in presidential elections.

They don’t just do avian flu at the Iowa Health Prediction Markets. They’re working on regular flu, and the mumps too. Incidentally, the Iowa Electronic Markets just started traded in the 2008 elections today.

Some of these ideas are just trendy, and some are really smart. This one? I’m betting it’s really smart. In fact, if the model continues to be effective, I can think of all sorts of opportunities to use this approach in the private sector, can’t you?

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