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Economic Development and HIV/AIDS Prevalence

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Author Info
C. Robert Clark ()
Désiré Vencatachellum ()

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Abstract

There is a strong negative relationship between economic development and HIV/AIDS prevalence throughout the world. However in Sub-Saharan Africa where the epidemic is worst, this relationship does not hold. Some of the wealthier countries in this region have some of the highest rates of HIV/AIDS prevalence in the world. In order to explain these observations, we set up a two-period model where individuals derive utility from consumption and sexual encounters. Those who expect their second-period consumption to be sufficiently low may engage in unsafe sex, despite the possibility of contracting HIV, if it provides higher instantaneous utility. We show that poorer countries will feature a higher share of the population engaging in unsafe sex, and therefore a higher prevalence of HIV. In economies where the external effect of human capital is high, additional equilibria exist in which even wealthier individuals choose unsafe sex if they expect a large share of the population to do so. This is because if many people engage in unsafe sex, there will be a lower level of aggregate human capital (due to AIDS deaths) and hence lower second-period income, and consumption. Economies featuring multiple equilibria may select one in which a large fraction of the population is engaged in unsafe sex because of beliefs about the transmission of HIV/AIDS.

Nous documentons une forte relation négative entre le taux de prévalence du VIH/SIDA et le niveau de développement économique au niveau mondial. Cependant, cette relation ne tient pas en Afrique Sub-Saharienne qui est paradoxalement la région la plus touchée par le VIH/SIDA. Plusieurs pays parmi les plus riches de cette région ont des taux de prévalence très élevés. Afin d'expliquer ce phénomène, nous construisons un modèle où chaque individu vit pendant deux périodes et où son utilité est fonction de sa consommation et de son activité sexuelle. Ceux qui s'attendent à obtenir un revenu relativement faible pendant le reste de leur vie peuvent décider d'avoir des rapports sexuels non protégés en dépit du risque de contracter le VIH. Ce choix est motivé par l'utilité instantanée plus élevée qu'ils obtiennent en ayant un rapport sexuel sans préservatif. Nous démontrons que le taux de prévalence du VIH/SIDA devrait être plus élevé dans les pays pauvres car une plus grande part de la population choisirait d'avoir des rapports sexuels non protégés. Cependant, il peut exister des équilibres multiples dans les économies où les externalités associées au capital humain sont élevées. Dans ce cas, même ceux qui sont relativement riches peuvent choisir d'avoir des relations sexuelles non protégées s'ils anticipent qu'une part importante de la population ferait de même. Si telles sont les anticipations, alors le niveau de capital humain anticipé est faible en raison de la mortalité due au SIDA. Ceci a un effet négatif sur le revenu et la consommation futurs. Ceci explique pourquoi même ceux qui sont relativement riches peuvent choisir d'avoir des relations sexuelles sans préservatif. Si les conditions sont requises pour qu'il y ait des équilibres multiples dans une économie, alors l'équilibre où la prévalence du VIH/SIDA est le plus élevé pourrait être choisi en raison des croyances sur les modes de transmission du VIH/SIDA.

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Paper provided by CIRANO in its series CIRANO Working Papers with number 2003s-25.

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Date of creation: 01 May 2003
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Handle: RePEc:cir:cirwor:2003s-25

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Related research
Keywords: HIV/AIDS human-capital externalities Sub Saharan Africa VIH/SIDA capital humain Afrique Sub-Saharienne

Find related papers by JEL classification:
I10 - Health, Education, and Welfare - - Health - - - General
I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General

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  1. De Walque, Damien, 2004. "How does the impact of an HIV/AIDS information campaign vary with educational attainment ? Evidence from rural Uganda," Policy Research Working Paper Series 3289, The World Bank. [Downloadable!]
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  2. de Walque, Damien, 2006. "Who gets AIDS and how ? The determinants of HIV infection and sexual behaviors in Burkina Faso, Cameroon, Ghana, Kenya, and Tanzania," Policy Research Working Paper Series 3844, The World Bank. [Downloadable!]
  3. Chris Papageorgiou & Petia Stoytcheva, . "What Do We Know About the Impact of AIDS on Cross-Country Income So Far?," Departmental Working Papers 2005-01, Department of Economics, Louisiana State University. [Downloadable!]
  4. de Walque, Damien & Corno, Lucia, 2007. "The determinants of HIV infection and related sexual behaviors : evidence from Lesotho," Policy Research Working Paper Series 4421, The World Bank. [Downloadable!]
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