Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics University of California, Berkeley
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Econ
omic
s 17
2Is
sues
in A
frica
n E
cono
mic
Dev
elop
men
t
Pro
fess
or T
ed M
igue
lD
epar
tmen
t of E
cono
mic
sU
nive
rsity
of C
alifo
rnia
, Ber
kele
y
Econ
omic
s 17
2Is
sues
in A
frica
n E
cono
mic
Dev
elop
men
t
Lect
ure
12 �
Febr
uary
22,
200
7
Eco
nom
ics
172:
Lec
ture
12
3
Eco
nom
ics
172:
Lec
ture
12
4
Why
doe
s H
IV s
prea
d? A
sim
ple
mod
el
�Ti
min
g: tw
o pe
riods
, You
th (t
=1),
Old
age
(t=2
)�
Key
dec
isio
n in
You
th: E
ngag
e in
uns
afe
sex
or n
ot
�Li
kelih
ood
of li
ving
to O
ld a
ge:
�P
∈(0
,1)i
f HIV
-�
PH
IV∈
(0,P
)if H
IV+,
so
PH
IV<
P
�V
alue
of o
ne p
erio
d of
life
: V >
0�
Val
ue o
f uns
afe
sex:
S >
0
�A
ssum
e th
e ag
ent i
s H
IV-i
n he
r/his
you
th
Eco
nom
ics
172:
Lec
ture
12
5
Why
doe
s H
IV s
prea
d? A
sim
ple
mod
el
��R
atio
nal�
deci
sion
rule
: eng
age
in u
nsaf
e se
x if
the
�exp
ecte
d ut
ility
�of u
nsaf
e is
gre
ater
than
of s
afe
sex
EU
(Saf
e se
x)
= V
+ {P
V +
(1 �
P)*
0} =
V(1
+P)
�A
ssum
e un
safe
sex
alw
ays
lead
s pe
ople
to b
e H
IV+
EU
(Uns
afe
sex)
= {V
+S} +
{PH
IVV
+ (1
�P
HIV
)*0}
= V
(1+P
HIV
) + S
�E
U (U
nsaf
e se
x) �
EU
(Saf
e se
x) =
S +
V(P
HIV
�P
) > 0
Ben
efits
(+)
Cos
ts (-
)
Eco
nom
ics
172:
Lec
ture
12
6
Why
doe
s H
IV s
prea
d? A
n ex
tens
ion
�Im
agin
e pe
ople
do
not k
now
thei
r inf
ectio
n st
atus
. S/h
e th
inks
she
has
like
lihoo
d R
∈[0
,1]o
f alre
ady
bein
g H
IV+
EU
(Saf
e se
x)
= V
+ [R
PH
IV+
(1 �
R)P
]V
Eco
nom
ics
172:
Lec
ture
12
7
Why
doe
s H
IV s
prea
d? A
n ex
tens
ion
�Im
agin
e pe
ople
do
not k
now
thei
r inf
ectio
n st
atus
. S/h
e th
inks
she
has
like
lihoo
d R
∈[0
,1]o
f alre
ady
bein
g H
IV+
EU
(Saf
e se
x)
= V
+ [R
PH
IV+
(1 �
R)P
]V
Eco
nom
ics
172:
Lec
ture
12
8
Why
doe
s H
IV s
prea
d? A
n ex
tens
ion
�Im
agin
e pe
ople
do
not k
now
thei
r inf
ectio
n st
atus
. S/h
e th
inks
she
has
like
lihoo
d R
∈[0
,1]o
f alre
ady
bein
g H
IV+
EU
(Saf
e se
x)
= V
+ [R
PH
IV+
(1 �
R)P
]V
EU
(Uns
afe
sex)
= V
(1+P
HIV
) + S
(UN
CH
AN
GE
D)
Eco
nom
ics
172:
Lec
ture
12
9
Why
doe
s H
IV s
prea
d? A
n ex
tens
ion
�Im
agin
e pe
ople
do
not k
now
thei
r inf
ectio
n st
atus
. S/h
e th
inks
she
has
like
lihoo
d R
∈[0
,1]o
f alre
ady
bein
g H
IV+
EU
(Saf
e se
x)
= V
+ [R
PH
IV+
(1 �
R)P
]V
EU
(Uns
afe
sex)
= V
(1+P
HIV
) + S
(UN
CH
AN
GE
D)
�E
U (U
nsaf
e se
x) �
EU
(Saf
e se
x)=
S +
V(P
HIV
�P
)(1
�R
) > 0
Eco
nom
ics
172:
Lec
ture
12
10
Why
doe
s H
IV s
prea
d? A
n ex
tens
ion
�Im
agin
e pe
ople
do
not k
now
thei
r inf
ectio
n st
atus
. S/h
e th
inks
she
has
like
lihoo
d R
∈[0
,1]o
f alre
ady
bein
g H
IV+
EU
(Saf
e se
x)
= V
+ [R
PH
IV+
(1 �
R)P
]V
EU
(Uns
afe
sex)
= V
(1+P
HIV
) + S
(UN
CH
AN
GE
D)
�E
U (U
nsaf
e se
x) �
EU
(Saf
e se
x)=
S +
V(P
HIV
�P
)(1
�R
) > 0
��N
othi
ng to
lose
�: co
st o
f uns
afe
sex
smal
ler t
han
befo
re
Eco
nom
ics
172:
Lec
ture
12
11
Why
doe
s H
IV s
prea
d? A
n ex
tens
ion
�W
hat a
re im
plic
atio
ns o
f thi
s m
odel
for p
ublic
hea
lth
mes
sage
s th
at s
tress
how
wid
espr
ead
the
HIV
viru
s al
read
y is
?
Eco
nom
ics
172:
Lec
ture
12
12
Why
doe
s H
IV s
prea
d? A
n ex
tens
ion
�W
hat a
re im
plic
atio
ns o
f thi
s m
odel
for p
ublic
hea
lth
mes
sage
s th
at s
tress
how
wid
espr
ead
the
HIV
viru
s al
read
y is
?--
This
incr
ease
s th
e R
term
in th
e m
odel
Eco
nom
ics
172:
Lec
ture
12
13
Why
doe
s H
IV s
prea
d? A
n ex
tens
ion
�W
hat a
re im
plic
atio
ns o
f thi
s m
odel
for p
ublic
hea
lth
mes
sage
s th
at s
tress
how
wid
espr
ead
the
HIV
viru
s al
read
y is
?
�W
hat a
re th
e im
plic
atio
ns o
f thi
s m
odel
for e
fforts
to
boos
t AR
V tr
eatm
ent (
e.g.
, Bot
swan
a)?
Eco
nom
ics
172:
Lec
ture
12
14
Why
doe
s H
IV s
prea
d? A
n ex
tens
ion
�W
hat a
re im
plic
atio
ns o
f thi
s m
odel
for p
ublic
hea
lth
mes
sage
s th
at s
tress
how
wid
espr
ead
the
HIV
viru
s al
read
y is
?
�W
hat a
re th
e im
plic
atio
ns o
f thi
s m
odel
for e
fforts
to
boos
t AR
V tr
eatm
ent (
e.g.
, Bot
swan
a)?
--Th
is in
crea
ses
the
PH
IVte
rm in
the
mod
el
Eco
nom
ics
172:
Lec
ture
12
15
Why
doe
s H
IV s
prea
d? A
n ex
tens
ion
�W
hat a
re im
plic
atio
ns o
f thi
s m
odel
for p
ublic
hea
lth
mes
sage
s th
at s
tress
how
wid
espr
ead
the
HIV
viru
s al
read
y is
?
�W
hat a
re th
e im
plic
atio
ns o
f thi
s m
odel
for e
fforts
to
boos
t AR
V tr
eatm
ent (
e.g.
, Bot
swan
a)?
!In
bot
h ca
ses,
the
mod
el p
redi
cts
that
uns
afe
sex
coul
d in
crea
sedu
e to
thes
e he
alth
pol
icy
chan
ges
Eco
nom
ics
172:
Lec
ture
12
16
Wha
t is
this
mod
el m
issi
ng?
(1)
Peo
ple
are
altru
istic
-Allo
w th
e be
nefit
s of
uns
afe
sex
to b
e a
func
tion
of R
: S
= S
(R).
This
may
offs
et th
e �n
othi
ng to
lose
�effe
ct
Eco
nom
ics
172:
Lec
ture
12
17
Wha
t is
this
mod
el m
issi
ng?
(1)
Peo
ple
are
altru
istic
-Allo
w th
e be
nefit
s of
uns
afe
sex
to b
e a
func
tion
of R
: S
= S
(R).
This
may
offs
et th
e �n
othi
ng to
lose
�effe
ct
�Fo
r exa
mpl
e, le
t S =
S(1
�R
)E
U (U
nsaf
e se
x) �
EU
(Saf
e se
x)=
S(1
�R
) + V
(PH
IV�
P)(
1 �
R)
= (1
�R
)(S
+ V
(PH
IV�
P))
> 0
Eco
nom
ics
172:
Lec
ture
12
18
Wha
t is
this
mod
el m
issi
ng?
(1)
Peo
ple
are
altru
istic
-Allo
w th
e be
nefit
s of
uns
afe
sex
to b
e a
func
tion
of R
: S
= S
(R).
This
may
offs
et th
e �n
othi
ng to
lose
�effe
ct
�Fo
r exa
mpl
e, le
t S =
S(1
�R
)E
U (U
nsaf
e se
x) �
EU
(Saf
e se
x)=
S(1
�R
) + V
(PH
IV�
P)(
1 �
R)
= (1
�R
)(S
+ V
(PH
IV�
P))
> 0
!In
this
cas
e th
e �n
othi
ng to
lose
�effe
ct a
nd th
e �a
ltrui
sm e
ffect
�exa
ctly
can
cel o
ut
Eco
nom
ics
172:
Lec
ture
12
19
Wha
t is
this
mod
el m
issi
ng?
(1)
Peo
ple
are
altru
istic
-Allo
w th
e be
nefit
s of
uns
afe
sex
to b
e a
func
tion
of R
: S
= S
(R).
This
may
offs
et th
e �n
othi
ng to
lose
�effe
ct
(2)
Not
all
sexu
al c
hoic
es a
re v
olun
tary
(e.g
., ra
pe)
Eco
nom
ics
172:
Lec
ture
12
20
Wha
t is
this
mod
el m
issi
ng?
(1)
Peo
ple
are
altru
istic
-Allo
w th
e be
nefit
s of
uns
afe
sex
to b
e a
func
tion
of R
: S
= S
(R).
This
may
offs
et th
e �n
othi
ng to
lose
�effe
ct
(2)
Not
all
sexu
al c
hoic
es a
re v
olun
tary
(e.g
., ra
pe)
(3)
Soc
ial /
cul
tura
l nor
ms
rega
rdin
g �a
ccep
tabl
e�se
xual
be
havi
or, e
spec
ially
rega
rdin
g sa
fe s
ex
Eco
nom
ics
172:
Lec
ture
12
21
Wha
t is
this
mod
el m
issi
ng?
(1)
Peo
ple
are
altru
istic
-Allo
w th
e be
nefit
s of
uns
afe
sex
to b
e a
func
tion
of R
: S
= S
(R).
This
may
offs
et th
e �n
othi
ng to
lose
�effe
ct
(2)
Not
all
sexu
al c
hoic
es a
re v
olun
tary
(e.g
., ra
pe)
(3)
Soc
ial /
cul
tura
l nor
ms
rega
rdin
g �a
ccep
tabl
e�se
xual
be
havi
or, e
spec
ially
rega
rdin
g sa
fe s
ex
(4)
Poc
kets
of p
oor i
nfor
mat
ion
abou
t HIV
/AID
S(5
)O
ther
s?
Eco
nom
ics
172:
Lec
ture
12
22
Eco
nom
ics
172:
Lec
ture
12
23
Wha
t can
pub
lic p
olic
y do
abo
ut H
IV/A
IDS
?
Eco
nom
ics
172:
Lec
ture
12
24
Wha
t can
pub
lic p
olic
y do
abo
ut H
IV/A
IDS
?
(1)
Test
ing
peop
le, i
nfor
m th
em o
f the
ir H
IV s
tatu
s
Eco
nom
ics
172:
Lec
ture
12
25
Wha
t can
pub
lic p
olic
y do
abo
ut H
IV/A
IDS
?
(1)
Test
ing
peop
le, i
nfor
m th
em o
f the
ir H
IV s
tatu
s--
In th
e m
odel
, tes
ting
wou
ld c
hang
e R
to z
ero
(if th
e pe
rson
is H
IV-)
or t
o on
e (if
HIV
+). S
o it
coul
d th
eore
tical
ly e
ither
incr
ease
or d
ecre
ase
unsa
fe s
ex,
depe
ndin
g on
wha
t peo
ple�
s ex
pect
atio
ns a
re a
bout
th
eir i
nfec
tion
stat
us
Eco
nom
ics
172:
Lec
ture
12
26
Wha
t can
pub
lic p
olic
y do
abo
ut H
IV/A
IDS
?
(1)
Test
ing
peop
le, i
nfor
m th
em o
f the
ir H
IV s
tatu
s
(2)
Con
dom
dis
tribu
tion
Eco
nom
ics
172:
Lec
ture
12
27
Wha
t can
pub
lic p
olic
y do
abo
ut H
IV/A
IDS
?
(1)
Test
ing
peop
le, i
nfor
m th
em o
f the
ir H
IV s
tatu
s
(2)
Con
dom
dis
tribu
tion
(3)
Pub
lic h
ealth
info
rmat
ion
cam
paig
ns (e
.g.,
Uga
nda)
Eco
nom
ics
172:
Lec
ture
12
28
Wha
t can
pub
lic p
olic
y do
abo
ut H
IV/A
IDS
?
(1)
Test
ing
peop
le, i
nfor
m th
em o
f the
ir H
IV s
tatu
s
(2)
Con
dom
dis
tribu
tion
(3)
Pub
lic h
ealth
info
rmat
ion
cam
paig
ns (e
.g.,
Uga
nda)
(4)
Reg
ulat
e pr
ostit
utio
n
Eco
nom
ics
172:
Lec
ture
12
29
Wha
t can
pub
lic p
olic
y do
abo
ut H
IV/A
IDS
?
(1)
Test
ing
peop
le, i
nfor
m th
em o
f the
ir H
IV s
tatu
s
(2)
Con
dom
dis
tribu
tion
(3)
Pub
lic h
ealth
info
rmat
ion
cam
paig
ns (e
.g.,
Uga
nda)
(4)
Reg
ulat
e pr
ostit
utio
n
(5)
Sub
sidi
ze tr
eatm
ent f
or a
nti-r
etro
vira
l med
ical
tre
atm
ent (
AR
Vs)
. (C
ompl
ianc
e an
d in
stitu
tiona
l ca
paci
ty?
Pro
fits
/ sm
uggl
ing?
)
Eco
nom
ics
172:
Lec
ture
12
30
Wha
t can
pub
lic p
olic
y do
abo
ut H
IV/A
IDS
?
(1)
Test
ing
peop
le, i
nfor
m th
em o
f the
ir H
IV s
tatu
s
(2)
Con
dom
dis
tribu
tion
(3)
Pub
lic h
ealth
info
rmat
ion
cam
paig
ns (e
.g.,
Uga
nda)
(4)
Reg
ulat
e pr
ostit
utio
n
(5)
Sub
sidi
ze tr
eatm
ent f
or a
nti-r
etro
vira
l med
ical
tre
atm
ent (
AR
Vs)
. (C
ompl
ianc
e an
d in
stitu
tiona
l ca
paci
ty?
Pro
fits
/ sm
uggl
ing?
)
(6)
Dev
elop
men
t of a
n H
IV v
acci
ne
Eco
nom
ics
172:
Lec
ture
12
31
�Fo
r nex
t tim
e: fi
nish
the
HIV
/AID
S s
ectio
n
Eco
nom
ics
172:
Lec
ture
12
32
Whi
tebo
ard
#1
Eco
nom
ics
172:
Lec
ture
12
33
Whi
tebo
ard
#2
Eco
nom
ics
172:
Lec
ture
12
34
Whi
tebo
ard
#3
Eco
nom
ics
172:
Lec
ture
12
35
Whi
tebo
ard
#4
Eco
nom
ics
172:
Lec
ture
12
36
Whi
tebo
ard
#5
Eco
nom
ics
172:
Lec
ture
12
37
Map
of A
frica
Eco
nom
ics
172:
Lec
ture
12
38
Map
of A
frica
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