The Economic Cost of AIDS in Sub-Saharan Africa: A Reassessment
Author(s)
Philipson, Tomas J.; Soares, Rodrigo R.
Abstract
Health and Economic Growth explores in detail the role that health plays in the economic growth of nations. The role of human capital in growth has been increasingly recognized and health and nutrition were brought into the analysis of human capital in the early 1990s. Health is, of course, a component of well-being but improvements in health may also be justified on economic grounds alone. Good health increases the level of human capital, effecting individual productivity and economic growth rates. Health and Economic Growth explores the causal relationship between health and economic growth. This piece looks at the more specific case of the economic cost of AIDS in Sub-Saharan Africa by reviewing and uses the value-of-life methodology to evaluate the full costs of AIDS in Sub-Saharan Africa. AIDS death statistics from UNAIDS and life tables from the World Health Organization are used to estimate counterfactual mortality rates that would be seen if AIDS did not exist. The welfare loss from changes in mortality rates due to AIDS is then estimated. It is clear that the full economic costs of AIDS, which takes into account non-marketed goods, is much larger than the costs measured by considering marketed goods alone.
