Michigan State University, Dept. of Agricultural Economics Measuring Impacts of HIV/AIDS on African Rural Economies T.S. Jayne Michigan State University Informal presentation at HSRC, Johannesburg July 13, 2004

Michigan State University, Dept. of Agricultural Economics Effective Response to HIV/AIDS Requires Knowledge of How Households Respond to the Disease Three-pronged attack: –Prevention –Treatment –Mitigation All depend on solid information on how individuals and households adapt and respond 20+ years after the onset of the disease, the empirical foundation for the design of programs is still weak

Michigan State University, Dept. of Agricultural Economics Objectives To understand how affected households respond/adapt to prime-age mortality To measure impacts on –Family size and composition –Crop production –Non-farm income –Asset levels To consider implications for policy

Michigan State University, Dept. of Agricultural Economics Characteristics of the national samples CountrySample sizeYear(s) of surveys Panel or cross- sectional Kenyan=1422 n= , 2000, 2002 Panel Malawin=420 n= , 2002 Panel Mozambiquen= Cross- section Rwandan= Cross- section Zambian= Cross- section

Michigan State University, Dept. of Agricultural Economics

What have we learned so far about measuring impacts?

Michigan State University, Dept. of Agricultural Economics Importance of panel (longitudinal) analysis

Michigan State University, Dept. of Agricultural Economics Pre-MortalityPost-Mortality Afflicted hhs Unafflicted hhs Importance of panel (longitudinal) analysis Household income

Michigan State University, Dept. of Agricultural Economics Finding #2 Afflicted households/individuals are not random Early 1990s: positively correlated with income, wealth, education, mobility More recent evidence: increasingly concentrated among the poor

Michigan State University, Dept. of Agricultural Economics Per Capita Income Status of Afflicted Households (ex ante) - Kenya Deceased prime- age males Deceased prime- age females Poorest 25% nd quartile rd quartile Wealthiest 25%

Michigan State University, Dept. of Agricultural Economics Per Capita Income Status of Afflicted Households - Zambia Deceased prime- age males Deceased prime- age females Poorest 25% nd quartile rd quartile Wealthiest 25%

Michigan State University, Dept. of Agricultural Economics Finding #3: Certain factors affect the magnitude of impacts on households Strong evidence that impacts depend on: –Initial level of household vulnerability (assets, wealth) –Sex of the deceased –Position in household of deceased –Ability of household to attract new members –Characteristics of adults remaining in household (e.g, skills, education level)

Michigan State University, Dept. of Agricultural Economics Gender Effects of Mortality on Crop Cultivation In Kenya: –Death of male head  acre to cash crops (e.g., sugarcane, horticulture) –Death of female head  acre to cereals, tubers

Michigan State University, Dept. of Agricultural Economics Effects of Death on Farm Production Sensitive to Gender, Position in HH Death of Male hh-head  68% reduction in value of crop output Death of Female head/spouse  less dramatic but still negative effects Why Effects of Male Prime Age Mortality are Greater? –Loss of female ag. labor to caregiving –Loss of higher-return crops Death of other hh member – insignificant effects on ag.

Michigan State University, Dept. of Agricultural Economics Finding #4 In some countries, the majority of prime- age mortality is among older sons / daughters, not heads / spouses

Michigan State University, Dept. of Agricultural Economics Position in household of deceased p.a. individuals Zambia: head/spouse other Rwanda: head/spouse other Mozambique: head/spouse other Malawi: head/spouse other Kenya: head/spouse other Afflicted M F Non-afflicted M F

Michigan State University, Dept. of Agricultural Economics Finding 5: Effects More Severe on the Poor Very few significant effects detected among households in top half of asset distribution Effects on ag production and non-farm income were larger and more highly significant among the poor

Michigan State University, Dept. of Agricultural Economics Implications - I Not clear that afflicted households need or should be urged to use: –labor-saving crop technologies Why? –Afflicted hhs, on average, have as much labor and land/labor ratios as non-affected hhs –crops / techniques that reduce labor input per acre may sacrifice income and food produced per acre –Must take into account population density and extent of under-employed labor

Michigan State University, Dept. of Agricultural Economics Population Size, 2000 vs (projected) Seven Most Highly Afflicted Countries Males < 20 Males Females < 20 Females millions

Michigan State University, Dept. of Agricultural Economics Implication - II Not clear that afflicted households should be urged to grow: –“more nutritious” foods Why? –Crops that maximize nutrition / kg produced ≠ –maximize nutrition / acre or income / acre -- need to take account of which crops provide greatest return to land / labor in a given area

Michigan State University, Dept. of Agricultural Economics 1, Crop Y 1, Crop X Nutritional units per acre Kgs produced per acre Nutritional units / kg produced

Michigan State University, Dept. of Agricultural Economics Summary Adult mortality’s greatest effects are: –On the relatively poor –When male head dies –When death is other than the hh head/spouse, the household is better able to draw back other members to help the hh adjust

Michigan State University, Dept. of Agricultural Economics What are we learning about “community effects”: What determines community “resilience”? Local institutions/traditions influence resilience –Example of sugarcane outgrower programs in Kenya –Land tenure / land inheritance H 0 : resilience is influenced by Initial level of poverty in community Rules governing women’s rights and access to resources –e.g. can widows retain land after husband’s death? Matrilineal vs. patrilineal effects

Michigan State University, Dept. of Agricultural Economics Need for appropriate balance between: Investing in long-term productivity growth (education, infrastructure, markets) vs Targeted assistance to affected HHs Pro-poor development is important to mitigate economic effects of HIV/AIDS

Michigan State University, Dept. of Agricultural Economics

“Difference-in-Difference” Approach )y - )x )y)yy2y2 y1y1 )x)xx2x2 x1x1 difference Afflicted households Households not afflicted Difference

Michigan State University, Dept. of Agricultural Economics Adult Mortality Rates - Women

Michigan State University, Dept. of Agricultural Economics Adult Mortality Rates - Men

Michigan State University, Dept. of Agricultural Economics