Advanced Search
MyIDEAS: Login

A Life Insurance Deterrent to Risky Behavior in Africa

Contents:

Author Info

  • de Araujo, Pedro
  • Murray, James
Registered author(s):

    Abstract

    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.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://mpra.ub.uni-muenchen.de/22675/
    File Function: original version
    Download Restriction: no

    Bibliographic Info

    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 22675.

    as in new window
    Length:
    Date of creation: 12 May 2010
    Date of revision:
    Handle: RePEc:pra:mprapa:22675

    Contact details of provider:
    Postal: Schackstr. 4, D-80539 Munich, Germany
    Phone: +49-(0)89-2180-2219
    Fax: +49-(0)89-2180-3900
    Web page: http://mpra.ub.uni-muenchen.de
    More information through EDIRC

    Related research

    Keywords: AIDS; life-cycle; life expectancy; sub-Saharan Africa;

    Find related papers by JEL classification:

    This paper has been announced in the following NEP Reports:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Fiona Stewart & Juan Yermo, 2009. "Pensions in Africa," OECD Working Papers on Insurance and Private Pensions 30, OECD Publishing.
    2. Channing Arndt & Jeffrey D. Lewis, 2001. "The HIV|AIDS pandemic in South Africa: sectoral impacts and unemployment," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(4), pages 427-449.
    3. R Bonnel, 2000. "HIV/AIDS and Economic Growth: A Global Perspective," South African Journal of Economics, Economic Society of South Africa, vol. 68(5), pages 360-379, December.
    4. Bloom, David E. & Mahal, Ajay S., 1997. "Does the AIDS epidemic threaten economic growth?," Journal of Econometrics, Elsevier, vol. 77(1), pages 105-124, March.
    5. Angus Deaton & Jane Fortson & Robert Tortora, 2008. "Life (evaluation), HIV/AIDS, and death in Africa," Working Papers 1121, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
    6. Ainsworth, Martha & Over, Mead, 1994. "AIDS and African Development," World Bank Research Observer, World Bank Group, vol. 9(2), pages 203-40, July.
    7. Sherwin Rosen, . "The Value of Changes in Life Expectancy," University of Chicago - Population Research Center 87-14, Chicago - Population Research Center.
    8. Arthur, W B, 1981. "The Economics of Risks to Life," American Economic Review, American Economic Association, vol. 71(1), pages 54-64, March.
    9. Cuddington, John T, 1993. "Modeling the Macroeconomic Effects of AIDS, with an Application to Tanzania," World Bank Economic Review, World Bank Group, vol. 7(2), pages 173-89, May.
    10. Clive Bell & Shantayanan Devarajan & Hans Gersbach, 2003. "The long-run economic costs of AIDS : theory and an application to South Africa," Policy Research Working Paper Series 3152, The World Bank.
    11. C Arndt & J D Lewis, 2000. "The Macro Implications of HIV/AIDS in South Africa: A Preliminary Assessment," South African Journal of Economics, Economic Society of South Africa, vol. 68(5), pages 380-392, December.
    12. Ulin, Priscilla R., 1992. "African women and AIDS: Negotiating behavioral change," Social Science & Medicine, Elsevier, vol. 34(1), pages 63-73, January.
    13. Emily Oster, 2007. "Routes of Infection: Exports and HIV Incidence in Sub-Saharan Africa," NBER Working Papers 13610, National Bureau of Economic Research, Inc.
    14. Arndt, Channing, 2006. "HIV/AIDS, human capital, and economic growth prospects for Mozambique," Journal of Policy Modeling, Elsevier, vol. 28(5), pages 477-489, July.
    15. Cuddington, John T & Hancock, John D, 1995. "The Macroeconomic Impact of AIDS in Malawi: A Dualistic, Labour Surplus Economy," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 4(1), pages 1-28, May.
    16. Corrigan, Paul & Glomm, Gerhard & Mendez, Fabio, 2005. "AIDS crisis and growth," Journal of Development Economics, Elsevier, vol. 77(1), pages 107-124, June.
    17. Pascaline Dupas, 2011. "Do Teenagers Respond to HIV Risk Information? Evidence from a Field Experiment in Kenya," American Economic Journal: Applied Economics, American Economic Association, vol. 3(1), pages 1-34, January.
    18. Emily Oster, 2005. "Sexually Transmitted Infections, Sexual Behavior, and the HIV/AIDS Epidemic," The Quarterly Journal of Economics, MIT Press, vol. 120(2), pages 467-515, May.
    19. Cuddington, John T. & Hancock, John D., 1994. "Assessing the impact of AIDS on the growth path of the Malawian economy," Journal of Development Economics, Elsevier, vol. 43(2), pages 363-368, April.
    20. Kremer, Michael, 1996. "Integrating Behavioral Choice into Epidemiological Models of AIDS," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 549-73, May.
    21. Alwyn Young, 2005. "The Gift of the Dying: The Tragedy of Aids and the Welfare of Future African Generations," The Quarterly Journal of Economics, MIT Press, vol. 120(2), pages 423-466, May.
    22. Simon Dixon & Scott McDonald & Jennifer Roberts, 2001. "AIDS and economic growth in Africa: a panel data analysis," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(4), pages 411-426.
    23. Cuddington, John T. & Hancock, John D. & Rogers, Carol Ann, 1994. "A dynamic aggregative model of the AIDS epidemic with possible policy interventions," Journal of Policy Modeling, Elsevier, vol. 16(5), pages 473-496, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Fight AIDS with life insurance
      by Economic Logician in Economic Logic on 2010-06-11 14:05:00

    Lists

    This item is featured on the following reading lists or Wikipedia pages:
    1. Economic Logic blog

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:22675. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.