The Economics of HIV/AIDS

Economics is inextricably linked with HIV/AIDS. Economic conditions affect HIV/AIDS and, in turn, HIV/AIDS affects an economy at both the macro and micro levels. Thus, the link works in both directions. In this chapter, we examine the relationships between HIV/AIDS and poverty, inequality and social capital, and consider whether economic differences between countries explain differences in HIV prevalence. As we have noted in Chap. 3, HIV/AIDS disproportionately affects people of working age. In this chapter, we examine the potential economic impact of HIV/AIDS, using a macroeconomic model. This is followed by a review of microeconomic and epidemiological models that try to answer questions about the behavioral response of people who are either at risk of or actually living with HIV/AIDS. Such studies provide a useful mechanism for determining the effectiveness of HIV/AIDS prevention strategies (a topic we explore further in Chap. 9). Economics plays a significant role in the propagation of HIV/AIDS in high incidence countries. The economics of HIV/AIDS also shows us the likely economic returns on different strategies to prevent HIV infections.