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HIV/AIDS and Poverty in South Africa : A Bayesian Estimation

  • Federica MARZO

    (Crest)

  • Fabrice MURTIN

    (Crest)

In this paper we estimate the causal impact of HIV/AIDS on monetary poverty. Using a paneldatabase from South Africa, we model the consequences of illness on both labor income andtransfers. We treat endogeneity and selection problems associated to HIV/AIDS through using aselection model that includes correlated fixed-effects both in the level and the participationequations, which are estimated simultaneously via original Bayesian methods. While no significantimpact of HIV/AIDS on household labor income is found due to households recomposition, asignificant and asymmetric impact on income transfers emerges. For urban populations, we find thatHIV/AIDS has a positive impact on the probability of receiving social and private transfers, servingto marginally reduce poverty, while for rural populations, HIV/AIDS causes a substantial fall inreceived transfers and dramatically increases chronic poverty.

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Paper provided by Centre de Recherche en Economie et Statistique in its series Working Papers with number 2009-12.

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Length: 48
Date of creation: 2009
Date of revision:
Handle: RePEc:crs:wpaper:2009-12
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  1. Dean R. Hyslop, 1999. "State Dependence, Serial Correlation and Heterogeneity in Intertemporal Labor Force Participation of Married Women," Econometrica, Econometric Society, vol. 67(6), pages 1255-1294, November.
  2. Gubert, Flore & Fafchamps, Marcel, 2007. "Risk Sharing and Network Formation," Economics Papers from University Paris Dauphine 123456789/10840, Paris Dauphine University.
  3. Ethan Ligon & Jonathan P. Thomas & Tim Worrall, 2000. "Mutual Insurance, Individual Savings and Limited Commitment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 3(2), pages 216-246, April.
  4. Coate, Stephen & Ravallion, Martin, 1993. "Reciprocity without commitment : Characterization and performance of informal insurance arrangements," Journal of Development Economics, Elsevier, vol. 40(1), pages 1-24, February.
  5. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
  6. Maitra, Pushkar & Ray, Ranjan, 2003. "The effect of transfers on household expenditure patterns and poverty in South Africa," Journal of Development Economics, Elsevier, vol. 71(1), pages 23-49, June.
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