University of Iowa Health Prediction Market

in collaboration with

the Center for Biopreparedness Education,
the Creighton Health Services Research Program,
and the Nebraska Department of Health and Human Services


2007-08 Seasonal Influenza Activity in Nebraska

Seasonal influenza causes substantial morbidity and mortality -- an estimated 36,000 deaths and 120,000 hospitalizations annually in the U.S. alone. Influenza recurs each year in regular cycles, but the geographic location, timing, rates of increase and decline, duration, and size of each outbreak varies. Statistical models using historical data might accurately describe the typical pattern, but these models have difficulty predicting departures from the norm. Yet, large deviations are of the most concern to public health officials, clinicians, and health care systems and, therefore, are the most important events to predict.

A vaccine and prophylactic medications are available for influenza, but the effectiveness of these measures depends upon when they are used. For example, immunity to influenza virus reaches its peak two weeks after vaccination and may wane before the annual epidemic occurs. Thus, public health officials and health care providers could use accurate forecasts -- even 2 weeks in advance -- of influenza activity to inform their efforts to both protect specific persons and communities and secure the resources—including drugs and health care workers—necessary to care for persons who acquire influenza.

Our Seasonal Influenza Activity Markets are an attempt to provide such short-term, state-level forecasts. Health care workers do possess information about current influenza activities, and they form opinions about the future course of that activity. This information is, however, of a diverse nature and is widely distributed. Participation in a prediction market will allow them to share their information and informed opinions.

Participants
Health care workers with information about influenza in Nebraska are the experts who are invited to participate as traders in this market. They include microbiologists, epidemiologists, physicians, emergency room personnel, nurses, pharmacists and health care administrators, and they are recruited from all corners of the state and surrounding region.

The Market
Early each week during the influenza Season from October through April, the state epidemiolgists from each of the 50 states inform the CDC about the level of influenza activity in thier state during the previous week. The CDC collects this information and on Friday releases a map reflecting the level of influenza activity across the nation during the Sunday through Saturday of the previous week. The map indicates how widespread influenza was in that state -- no activity, sporadic activity, local concentrations, regional activity and widespread activity. A prediction of the level designation for the state of Nebraska for each of the next six weeks is the objective of the market.

A market for a given target week will open on the Saturday six weeks prior to the end of the target week. Trading will continue for six weeks, closing on the last day of the target week. (Accordingly, six markets will be open for trading at any point in time during the heart of the influenza season.) The following Friday, after the CDC releases the map for the target week, contracts will be liquidated.

Five contracts trade in the market for each target week, one for each of the five possible activity-levels. The eventual value of one share of a level of activity for a given target week will be worth Flu$1.00 if that is the level announced by the CDC for Nebraska for the target week, and Flu$0.00 if it is not. (The Flu$ is the artificial currency used in this market.) Prices at which participants trade the individual level-coded contracts will be taken as a prediction of the probability that the corresponding level will be the one announced for that target week.

Incentives
Each participating trader admitted to the market will be given a trading account endowed with Flu$100.00. Additions to this account will be made during the influenza season to reward traders for participation. In particular, Flu$1.00 will be deposited in the traders account each week for each of the six target-week markets for which that trader submitted orders to buy or sell. The balance in the account will rise or fall as trades are executed, with purchases of shares charged to the account, sales of shares credited to the account, and values of contract liquidations credited to the account. At the end of the influenza season, the US$ equivalent value of the balance remaining in a trader's account will be offered to that trader as an educational grant.

Resources