de Araujo, Pedro and Murray, James (2010): A Life Insurance Deterrent to Risky Behavior in Africa.
Download (826Kb) | Preview
The spread of HIV and AIDS and risky sexual behavior continues to be a problem in Sub-Saharan African countries despite government measures to educate people on the risk and severity of the disease and measures to promote safe sex practices such as making condoms readily available at reduced or no cost. We examine whether people decide to engage in risky sexual behavior due to low income and low life expectancy. Sub-Saharan Africa is characterized by conditions that significantly reduce life expectancy such as unsanitary conditions prevalent in poverty stricken areas, inaccessibility to health care, and dangerous working conditions such as those in very poor mining regions. Moreover, since income per capita in these countries is very low, the opportunity cost associated with dying from AIDS and foregoing future consumption is very low. We examine how a government provided life insurance benefit may be an effective means of deterring risky sexual behavior. To evaluate this policy prescription we develop a life-cycle model with personal and family consumption and endogenous probability of survival. In the model, agents can receive life insurance benefits if their death is not the result of AIDS. We demonstrate that excessive risky behavior does result from low life expectancy and low levels of income and illustrate the conditions for which the life insurance benefit can replicate the effects of higher income and life expectancy, deterring risky sexual behavior and reducing the spread of HIV/AIDS.
|Item Type:||MPRA Paper|
|Original Title:||A Life Insurance Deterrent to Risky Behavior in Africa|
|Keywords:||AIDS; life-cycle; life expectancy; sub-Saharan Africa|
|Subjects:||H - Public Economics > H5 - National Government Expenditures and Related Policies > H51 - Government Expenditures and Health
I - Health, Education, and Welfare > I1 - Health > I18 - Government Policy; Regulation; Public Health
I - Health, Education, and Welfare > I3 - Welfare and Poverty > I38 - Government Policy; Provision and Effects of Welfare Programs
|Depositing User:||James Murray|
|Date Deposited:||17. May 2010 13:07|
|Last Modified:||21. Feb 2013 21:08|
Agarwal, S., P. de Araujo, and J. Paudel (2010): "Does HIV/AIDS Related Knowledge Affect Men's Decision to Have Sexual Encounters with Commercial Sex Workers? Evidence from sub-Saharan Africa," Colorado College - Mimeo.
Ainsworth, M., and M. Over (1994): "AIDS and African Development," The World Bank Research Observer, pp. 203-240.
(1997): "Confronting AIDS: Public Priorities in a Global Epidemic," World Bank Report - Oxford University Press.
Arndt, C. (2003): "HIV/AIDS, Human Capital, and Economic Growth Prospects for Mozambique," Journal of Policy Modeling, 28, 477-489.
Arndt, C., and J. Lewis (2000): "The Macro Implications of HIV/AIDS in South Africa: A Preliminary Assessment," Journal of South African Economics, 68(5), 856-887.
Arndt, C., and J. Lewis (2001): "The HIV/AIDS Pandemic in South Africa: Sectoral Impacts and Unemployment," Journal of International Development, 13, 427-449.
Arthur, W. B. (1981): "The Economics of Risks to Life," The American Economic Review, 71(1), 54-64.
Barnett, T., and A. Whiteside (2006): AIDS in the Twenty-First Century: Disease and Globalization. Palgrave Macmillan, 2nd edn.
Bell, C., S. Devarajan, and H. Gersbach (2003): "The Long-run Economic Costs of AIDS: Theory and an Application to South Africa," Washington, DC: World Bank.
Bloom, D. E., and A. S. Mahal (1997): "Does the AIDS Epidemic Threaten Economic Growth?," Journal of Econometrics, 77, 105-124.
Bloom, S., et al. (2000): "Looking for change in response to the AIDS epidemic: trends in AIDS knowledge and sexual behavior in Zambia, 1990 through 1998.," Journal of Acquired Immune Deciency Syndrome, 25(1), 77-85.
Bonnel, R. (2000): "HIV/AIDS and Economic Growth: A Global Perspective," Journal of South African Economics, 68(5), 820-855.
Botswana Institute for Development Policy Analysis (2000): "Macroeconomic Impact of the HIV/AIDS Epidemic in Botswana," Gaborone, Botswana: BIDPA.
Caldwell, J., et al. (1999): "Resistances to Behavioural Change to Reduce HIV/AIDS Infection in Predominantly Heterosexual Epidemics in Third World Countries" Health Transition Centre.
Corrigan, P., G. Glomm, and F. Mendez (2005): "AIDS Crisis and Growth," Journal of Development Economics, 77, 107-124.
Cuddington, J. T. (1993a): "Modeling the Macroeconomic Effects of AIDS, with an Application to Tanzania," World Bank Economic Review, 7(2), 173-189.
Cuddington, J. T. (1993b): "Further Results on the Macroeconomic Effects of AIDS: The Dualistic Labour-Surplus Economy," Journal of South African Economics, 7(3), 403-417.
Cuddington, J. T., and J. D. Hancock (1994): "Assessing the Impact of AIDS on the Growth Path of the Malawian Economy," Journal of Development Economics, 43, 363-368.
Cuddington, J. T., and J. D. Hancock (1995): "The Macroeconomic Impact of AIDS in Malawi: a Dualistic, Labour Surplus Economy," Journal of African Economies, 4(1), 1-28.
Cuddington, J. T., J. D. Hancock, and C. A. Rogers (1994): "A Dynamic Aggregative Model of the AIDS Epidemic with Possible Policy Interventions," Journal of Policy Modeling, 16(5), 473-496.
de Araujo, P. (2008): "The Socio-Economic Distribution of AIDS Incidence and Output," CAEPR Working Paper 2008-019.
de Walque, D. (2006): "Who Gets AIDS and How? The Determinants of HIV Infection and Sexual Behaviors in Burkina Faso, Cameroon, Ghana, Kenya, and Tanzania," World Bank Policy Research Working Paper 3844, pp. 1-51.
Deaton, A., J. Fortson, and R. Tortora (2009): "Life (Evaluation), HIV/AIDS, and Death in Africa," NBER Working Paper 14637.
Dixon, S., S. McDonald, and J. Roberts (2001): "AIDS and Economic Growth in Africa: A Panel Data Analysis," Journal of International Development, 13, 411-426.
Dixon, S., S. McDonald, and J. Roberts (2002): "The Impact of HIV and AIDS on Africa's Economic Development," British Medical Journal, 324, 232-234.
Dupas, P. (2009): "Do Teenagers Respond to HIV Risk Information? Evidence from a Field Experiment in Kenya," NBER Working Paper 14707.
Epstein, H. (2007): The Invisible Cure: Africa, the West, and the Fight Against AIDS. Farrar, Straus and Giroux.
Fortson, J. (2008): "Mortality Risk and Human Capital Investment: The Impact of HIV/AIDS in Sub-Saharan Africa," University of Chicago - Mimeo.
Green, E., et al. (2006): "Uganda's HIV Prevention Success: The Role of Sexual Behavior Change and the National Response," AIDS and Behavior, 10(4), 335-346.
Guinness, L., and A. Alban (2000): "The Economic Impact of AIDS in Africa, A Review of the Literature," UNAIDS background paper for the ADF 2000.
Hallet, T., and M. Over (2010): "How to Pay "Cash-on-Delivery" for HIV Infections Averted: Two Measurement Approaches and Ten Payout Functions," Center for Global Development Working Paper 210.
Hamoudi, A., and N. Birdsall (2002): "HIV/AIDS and the Accumulation and Utilization of Human Capital in Africa," Working Paper no. 2 (Center for Global Development), pp. 1-35.
Hargreaves, J., and J. Glynn (2002): "Educational Attainment and HIV-I Infection in Developing Countries: a Systematic Review," Tropical Medicine and International Health, 7(6), 489-498.
Kambou, G., S. Devarejan, and M. Over (1992): "The Economic Impact of AIDS in an African Country: Simulations with a Computable General Equilibrium Model of Cameroon," Journal of African Economies, 1(1), 109-130.
Kremer, M. (1996): "Integrating Behavioral Choice into Epidemiological Models of AIDS," Quarterly Journal of Economics, 111, 549-573.
Lagarde, G., et al. (1996): "Knowledge, attitudes and perception of AIDS in rural Senegal: relationship to sexual behaviour and behaviour change," AIDS, 10(3), 327-334.
Landefeld, J. S., and E. P. Seskin (1982): "The Economic Value of Life: Linking Theory to Practice," American Journal of Public Health, 72(6), 555-566.
Lindan, C., et al. (1991): "Knowledge, attitudes, and perceived risk of AIDS among urban Rwandan women: relationship to HIV infection and behavior change," AIDS, 5(8), 993-1002.
Meda, N., et al. (1999): "Low and stable HIV infection rates in Senegal: natural course of the epidemic or evidence for success of prevention?," AIDS, 13, 1397-1405.
Ng'weshemi, J., et al. (1996): "Changes in male sexual behaviour in response to the A Life Insurance Deterrent to Risky Behavior in Africa 29 AIDS epidemic: evidence from a cohort study in urban Tanzania," AIDS, 10(12), 1415-1420.
Oster, E. (2005): "Sexually Transmitted Infections, Sexual Behavior, and the HIV/AIDS Epidemic," Quarterly Journal of Economics, 120, 467-515.
Oster, E. (2007): "Routes to Infection: Exports and HIV Incidence in Sub-Saharan Africa," NBER Working Paper 13610.
Oster, E. (2009): "HIV and Sexual Behavior Change," University of Chicago Mimeo.
Over, M. (1992): "The Macroeconomic Impact of AIDS in Sub-Saharan Africa," Technical working paper no.3 (World Bank, Africa Technical department, Washington, DC), pp. 1-35.
Piot, P., M. Bartos, P. D. Ghys, N. Walker, and B. Schwartlander (2001): "The Global Impact of HIV/AIDS," Nature, 410, 968-973.
Piot, P., and M. Over (1993): HIV Infection and Sexually Transmitted Diseases in Disease Control Priorities in Developing Countries. Oxford University Press.
Rosen, S. (1988): "The Value of Changes in Life Expectancy," Journal of Risk and Uncertainty, 1, 285-304.
Santaeulàlia-Llopis, R. (2007): "Aggregate Effects of AIDS on Development," University of Pennsylvania - Mimeo.
Stewart, F., and J. Yermo (2009): "Pensions in Africa," OECD Working Papers on Insurance and Private Pensions No. 30.
Stoneburner, R., and D. Low-Beer (2004): "Population-Level HIV Declines and Behavioral Risk Avoidance in Uganda," Science, 304, 714-718.
Ulin, P. (1992): "African Women and AIDS: Negotiating Behavioral Change," Social Science & Medicine, 34, 63-73.
UNAIDS (2009): "AIDS Epidemic Update," Special Report on HIV/AIDS.
Vandermoortele, J., and E. Delamonica (2000): "The "Education Vaccine" Against HIV," Current Issues in Comparative Education, 3(1).
Viscusi, W. K. (1993): "The Value of Risks to Life and Health," Journal of Economic Literature, 31, 1912-1946.
Williams, B., et al. (2003): "Changing patterns of knowledge, reported behaviour and sexually transmitted infections in a South African gold mining community," AIDS, 17(14), 2099-2107.
World Bank (2001): "Lesotho: Selected Development Impact of HIV/AIDS," World Bank Macroeconomic Technical Group (Africa Region), Report No: 21103.
World Bank (2001a): "Swaziland: Selected Development Impact of HIV/AIDS," World Bank Macroeconomic Technical Group (Africa Region), Report No: 22944.
World Bank (2001b): "Namibia: Selected Development Impact of HIV/AIDS," World Bank Macroeconomic Technical Group (Africa Region), Report No: 22046.
Young, A. (2005a): "The Gift of Dying: The Tragedy of AIDS and the Welfare of Future African Generations," Quarterly Journal of Economics, 120, 243-266.
Young, A. (2005b): "In Sorrow to Bring Forth Children: Fertility amidst the Plague of HIV," University of Chicago - Booth Mimeo.