1. Economics 172 Issues in African Economic Development Lecture 8 February 9, 2006

2. Economics 1722 Outline: (1)Deworming in Kenya – public health policy issues (2)New topic: The Economics of HIV/AIDS in Africa

3. Economics 1723 Cost-benefit calculations Cost of this program: US$1.46 per pupil per year Cost of a larger-scale program in neighboring Tanzania: only US$0.49 per pupil per year

4. Economics 1724 Cost-benefit calculations Cost of this program: US$1.46 per pupil per year Cost of a larger-scale program in neighboring Tanzania: only US$0.49 per pupil per year Deworming as a human capital investment: Health gains  More schooling  Higher adult wages

5. Economics 1725 Cost-benefit calculations Deworming as a human capital investment: Health gains  More schooling  Higher adult wages Deworming led to 7% gain in school participation Previous study: each year of school  7% higher wages Take these gains in wages (7% x 7%) over 40 years in the workforce, discounted 5% per year

6. Economics 1726 Cost-benefit calculations Deworming as a human capital investment: Health gains  More schooling  Higher adult wages Deworming led to 7% gain in school participation Previous study: each year of school  7% higher wages Take these gains in wages (7% x 7%) over 40 years in the workforce, discounted 5% per year  Deworming benefits are at least three times (3x) as large as treatment costs (using the Tanzania costs)

7. Economics 1727 Given the returns, why is take-up not 100%?

8. Economics 1728 Given the returns, why is take-up not 100%? Possible explanations: (1) Free-riding / externalities -- Strong evidence people learned through their social network that the drugs were “not effective”

9. Economics 1729 Given the returns, why is take-up not 100%? Possible explanations: (1) Free-riding / externalities -- Strong evidence people learned through their social network that the drugs were “not effective” (2) Socio-cultural explanations / resistance to new technologies (evidence from anthropology)

10. Economics 17210 The Impact of Higher Drug Costs In 1998, 1999, 2000 deworming was given for free In 2001, parents in 25 randomly chosen Group 1 and Group 2 schools paid US$0.10-0.30 per child

11. Economics 17211 The Impact of Higher Drug Costs In 1998, 1999, 2000 deworming was given for free In 2001, parents in 25 randomly chosen Group 1 and Group 2 schools paid US$0.10-0.30 per child 2001 deworming take-up: Free-treatment schools:75% Cost-sharing schools:18%

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13. Economics 17213 The Economics of HIV/AIDS in Africa Of the 42 million people worldwide thought to be infected with HIV, approximately 25 million (!) are in Sub-Saharan Africa

14. Economics 17214

15. Economics 17215 The Economics of HIV/AIDS in Africa Of the 42 million people worldwide thought to be infected with HIV, approximately 25 million (!) are in Sub-Saharan Africa In some countries in southern Africa (e.g. Botswana, Swaziland), it is claimed that over 35% are HIV+

16. Economics 17216

17. Economics 17217 Counting HIV+ people in Kenya Based on antenatal clinic survey data, the official UNAIDS estimate of HIV+ adults in Kenya by late 2001 was 15.0%

18. Economics 17218 Counting HIV+ people in Kenya Based on antenatal clinic survey data, the official UNAIDS estimate of HIV+ adults in Kenya by late 2001 was 15.0% The 2003 Kenya Demographic and Health Survey (DHS) tried to survey a representative subsample of population. 73.4% agreed to be tested

19. Economics 17219 Counting HIV+ people in Kenya Based on antenatal clinic survey data, the official UNAIDS estimate of HIV+ adults in Kenya by late 2001 was 15.0% The 2003 Kenya Demographic and Health Survey (DHS) tried to survey a representative subsample of population. 73.4% agreed to be tested –This data indicates that “only” 6.7% of Kenyan 15-49 year olds tested are HIV+!

20. Economics 17220

21. Economics 17221 Counting HIV+ people in Kenya Based on antenatal clinic survey data, the official UNAIDS estimate of HIV+ adults in Kenya by late 2001 was 15.0% The 2003 Kenya Demographic and Health Survey (DHS) tried to survey a representative subsample of population. 73.4% agreed to be tested –This data indicates that “only” 6.7% of Kenyan 15-49 year olds tested are HIV+! Which of the two numbers is better?

22. Economics 17222

23. Economics 17223 Whiteboard #1

24. Economics 17224 Whiteboard #2

25. Economics 17225 Whiteboard #3

26. Economics 17226 Whiteboard #4

27. Economics 17227 Whiteboard #5

28. Economics 17228 Map of Africa