Estimating the mental health costs of racial discrimination

Amanuel Elias, Yin Paradies

Racial discrimination is a pervasive social problem in several advanced countries such as the U.S., U.K., and Australia. Public health research also indicates a range of associations between exposure to racial discrimination and negative health, particularly, mental health including depression, anxiety, and post-traumatic stress disorder (PTSD). However, the direct negative health impact of racial discrimination has not been costed so far although economists have previously estimated indirect non-health related productivity costs. In this study, we estimate the burden of disease due to exposure to racial discrimination and measure the cost of this exposure. Using prevalence surveys and data on the association of racial discrimination with health outcomes from a global meta-analysis, we apply a cost of illness method to measure the impact of racial discrimination. This estimate indicates the direct health cost attributable to racial discrimination and we convert the estimates to monetary values based on conventional parameters. Racial discrimination costs the Australian economy 235,452 in disability adjusted life years lost, equivalent to $37.9 billion per annum, roughly 3.02% of annual gross domestic product (GDP) over 2001-11, indicating a sizeable loss for the economy. Substantial cost is incurred due to increased prevalence of racial discrimination as a result of its association with negative health outcomes (e.g. depression, anxiety and PTSD). This implies that potentially significant cost savings can be made through measures that target racial discrimination. Our research contributes to the debate on the social impact of racial discrimination, with implications for policies and efforts addressing it.