Using primary household data from India we estimate family utility function parameters that measure the relative importance of consumption, schooling of children and health (both physical and mental) and find that mental health is far more important than consumption or children’s schooling in determining household utility. We then estimate that the monetary equivalent of the welfare loss to an HIV family is Rs. 66,039 per month, whereas the losses to an HIV male and female are Rs. 67,601 and Rs. 65,120 per month respectively. These figures are huge given that the average per capita consumption expenditure of the families in our sample is just Rs. 1,019 per month. This huge magnitude is not surprising as it includes private valuation of one’s own life as well as the cost of stigma for being HIV positive. In addition, the annual loss from external transfers (through debt, sale of assets and social insurance) accounts for 2.6% of annual health expenditure and 0.12% of GDP in 2004. The significance of mental health in welfare evaluation can be gauged from the fact that, for an average HIV family, a whopping 74% of the welfare loss comes from aspects of mental health.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
9946.
Find related papers by JEL classification: C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - General O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General D10 - Microeconomics - - Household Behavior - - - General I10 - Health, Education, and Welfare - - Health - - - General
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