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Collection: Faculty Working Papers  
Title A Life Insurance Deterrent to Risky Behavior in Africa
Author De Araujo, Pedro
Murray, James
Type of Resource text
Digital Origin born digital
Date Created 2010-05-12
Abstract The spread of HIV and AIDS and risky sexual behavior continues to be a problem in Sub-Saharan African countries despite government measures to educate people on the risk and severity of the disease and measures to promote safe sex practices such as making condoms readily available at reduced or no cost. We examine whether people decide to engage in risky sexual behavior due to low income and low life expectancy. Sub-Saharan Africa is characterized by conditions that signicantly reduce life expectancy such as unsanitary conditions prevalent in poverty stricken areas, inaccessibility to health care, and dangerous working conditions such as those in very poor mining regions. Moreover, since income per capita in these countries is very low, the opportunity cost associated with dying from AIDS and foregoing future consumption is very low. We examine how a government provided life insurance benet may be an effective means of deterring risky sexual behavior. To evaluate this policy prescription we develop a life-cycle model with personal and family consumption and endogenous probability of survival. In the model, agents can receive life insurance benets if their death is not the result of AIDS. We demonstrate that excessive risky behavior does result from low life expectancy and low levels of income and illustrate the conditions for which the life insurance benet can replicate the effects of higher income and life expectancy, deterring risky sexual behavior and reducing the spread of HIV/AIDS.
Keywords AIDS
Life cycle
Life expectancy
Rights Statement Copyright restrictions apply. Contact the author for permission to publish.
Note (admin) Acquired from Department of Economics and Business. Saved as PDF/A1.b using Adobe Acrobat Professional.
Language eng
Extent 45 p. : ill.
Local Identifier 2010-04
Handle http://hdl.handle.net/10176/coccc:3307
Attached Files
Name Description MIMEType Size Downloads
LifeInsurance.pdf   master application/pdf 1.14MB 0

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Created: Fri, 11 Feb 2011, 10:05:54 MST by Christine Ashlock (admin) . Detailed History