AIDS f06

Over 25 Million People Have Already Died of AIDS: 

Over 25 Million People Have Already Died of AIDS AIDS results in 3 million excess deaths each year

Over 40 Million People are Currently Infected: 

Over 40 Million People are Currently Infected Nearly 90% of these live Africa, Asia, and the Middle East (the largest share in Sub-Saharan Africa)

Adult (15-49) HIV Prevalence exceeds 20% in 7 countries: 

Adult (15-49) HIV Prevalence exceeds 20% in 7 countries Botswana (36.5%) Zimbabwe (33.9%) Swaziland (33.7%) Lesotho (30.1%) Namibia (22.2%) Zambia (21.6%) South Africa (20.6%) United States = 0.8% World AIDS prevalence rates are predicted to begin declining around 2010

Deaths and Death Rates (Top 53 Countries): 

Deaths and Death Rates (Top 53 Countries)

Deaths and Death Rates (Top 7 Countries): 

Deaths and Death Rates (Top 7 Countries)

Life Expectancy at Birth: 

Life Expectancy at Birth

Population Size: 

Population Size By 2025, it is estimated that the population of the 53 countries will be 5% smaller than it would have been in the absence of AIDS By 2025, it is estimated that the population of the 38 African countries will be 14% smaller By 2025, it is estimated that the population of the 7 countries with prevalence > 20% will be 35% smaller (77 million v. 118 million)

Age Structure: 

Age Structure The impact of AIDS is borne disproportionately by working-age adults, particularly working-age women

There Are About 15 Million AIDS Orphans: 

There Are About 15 Million AIDS Orphans Over 12 million in Sub-Saharan Africa alone

Microeconomics of AIDS in Africa: 

Microeconomics of AIDS in Africa Philipson and Posner (1995) analyzed the economics of AIDS in Sub-Saharan Africa AIDS in Africa is different from AIDS in the U.S. in five important ways Transmitted primarily through heterosexual sex Women are slightly more likely than men to be infected (prostitution) Infection is positively related to income AIDS has not yet peaked Incidence of other STDs is relatively high

Demand for Safe Sex: 

Demand for Safe Sex The demand for safe sex will be greater the greater the perceived benefits Demand for safe sex increases with education Demand for safe sex increases with life expectancy Demand for safe sex decreases as the availability of condoms increases All of these factors lead to lower demand for safe sex in Africa than in U.S.

Prostitution: 

Prostitution More common in Africa than in U.S. Women have fewer job opportunities Men have lower salaries Higher incidence of migrant work Polygamy raises men’s average age at marriage Lack of job alternatives results in a relatively inelastic supply of prostitution services => quantity doesn’t respond much to a change in demand

Income: 

Income Infection is positively related to income Demand for prostitute services is positively related to travel which is positively related to income Sex with multiple partners increases the risk of infection and access to multiple partners increases with income

Women’s Demand for Safe Sex: 

Women’s Demand for Safe Sex A women’s (and men’s) demand for safe sex is negatively related to the likelihood that she is already infected => lowers the perceived benefits of safe sex As the perceived likelihood of already being infected increases women are more likely to self select into prostitution—they are less marriageable

Policy Interventions: 

Policy Interventions Condom subsidies AIDS education Increased economic opportunities for women Increase education (particularly for women)

Impact of AIDS on Households: 

Impact of AIDS on Households Loss of income and wealth due to illness/death of family member, increased medical costs, and absenteeism of other relatives forces many AIDS-affected households into poverty Decreased food consumption Increased stress on older adults Children leave school early to get jobs or to take care of ill parents

Theoretical Impact of AIDS on Firms: 

Theoretical Impact of AIDS on Firms

Impact of AIDS on Agriculture: 

Impact of AIDS on Agriculture Large drops in production in AIDS-affected households (~50% in several African studies) Decrease in the supply of agricultural labor due to death and the time needed to care for sick relatives Switch from the production of cash crops to food crops Loss of agricultural knowledge

Impact of AIDS on Agriculture: 

Impact of AIDS on Agriculture

Impact of AIDS on Education: 

Impact of AIDS on Education Increased attrition and absenteeism of teachers and administrators reduces the quantity and quality of education Decrease in the number of school-age children due to AIDS mortality Increased education costs as school systems pay out more in medical expenses and death benefits Increased absenteeism and dropout of students from AIDS-affected households

Impact of AIDS on Economic Growth: 

Impact of AIDS on Economic Growth 0.3% to 4.0% decrease in the annual rate of growth of GDP in AIDS-affected countries magnitude is directly related to country’s AIDS prevalence projected larger impacts in the future Loss of social and human capital Increased poverty and income inequality Loss of welfare due to higher mortality