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Designing the Financial Tools to Promote Universal Access to AIDS Care

Author

Listed:
  • Patarick Leoni

    (Economics Department, National University of Ireland, Maynooth)

  • Stephane Luchini

Abstract

We argue that reluctance to invest in drug treatments to fight the AIDS epidemics in developing countries is largely motivated by severe losses occurring from the future albeit uncertain appearance of a curative vaccine. We design a set of securities generating full insurance coverage against such losses, while achieving full risk-sharing with vaccine development agencies. In a general equilibrium framework, we show that those securities are demanded to improve social welfare in developing countries, to increase current investment in treatments and the provision of public goods. Even though designed foi AIDS, those securities can also be applied to other epidemics such as Malaria and Tuberculosis.

Suggested Citation

  • Patarick Leoni & Stephane Luchini, 2006. "Designing the Financial Tools to Promote Universal Access to AIDS Care," Economics Department Working Paper Series n1711106, Department of Economics, National University of Ireland - Maynooth.
  • Handle: RePEc:may:mayecw:n1711106
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    References listed on IDEAS

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    1. Palmer, Stephen & Smith, Peter C., 2000. "Incorporating option values into the economic evaluation of health care technologies," Journal of Health Economics, Elsevier, vol. 19(5), pages 755-766, September.
    2. Avinash K. Dixit & Robert S. Pindyck, 1994. "Investment under Uncertainty," Economics Books, Princeton University Press, edition 1, number 5474.
    3. Michael Kremer & Edward Miguel & Rebecca Thornton, 2009. "Incentives to Learn," The Review of Economics and Statistics, MIT Press, vol. 91(3), pages 437-456, August.
    4. Michael Kremer & Christopher Snyder, 2004. "Why is There No AIDS Vaccine?," CID Working Papers 111, Center for International Development at Harvard University.
    5. Lasserre, Pierre & Moatti, Jean-Paul & Soubeyran, Antoine, 2006. "Early initiation of highly active antiretroviral therapies for AIDS: Dynamic choice with endogenous and exogenous learning," Journal of Health Economics, Elsevier, vol. 25(3), pages 579-598, May.
    6. Avinash Dixit, 2003. "Some Lessons from Transaction‐Cost Politics for Less‐Developed Countries," Economics and Politics, Wiley Blackwell, vol. 15(2), pages 107-133, July.
    7. Jean-Paul Moatti & Benjamin Coriat & Yves Souteyrand & Tony Barnett & Jérôme Dumoulin & Yves-Antoine Flori, 2003. "Economics of AIDS and access to HIV/AIDS care in developing countries : issues and challenges," Post-Print halshs-00112023, HAL.
    8. LeRoy,Stephen F. & Werner,Jan, 2014. "Principles of Financial Economics," Cambridge Books, Cambridge University Press, number 9781107024120, February.
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    Cited by:

    1. Fehr, Ernst & Fischbacher, Urs & Kosfeld, Michael, 2005. "Neuroeconomic Foundations of Trust and Social Preferences," IZA Discussion Papers 1641, Institute of Labor Economics (IZA).
    2. Armin Falk & Ernst Fehr & Christian Zehnder, "undated". "The Behavioral Effects of Minimum Wages," IEW - Working Papers 247, Institute for Empirical Research in Economics - University of Zurich.
    3. Tania Singer & Ernst Fehr, 2005. "The Neuroeconomics of Mind Reading and Empathy," American Economic Review, American Economic Association, vol. 95(2), pages 340-345, May.

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    More about this item

    Keywords

    HIV/Aids funding; security design; therapeutic innovation; health underinvestment; HIV/Aids vaccine;
    All these keywords.

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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