This paper provides an overview of the impact of the AIDS epidemic on national and regional economics.
The paper is divided in three parts.

1. Part 1 examines economic correlates of HIV transmission, using macro, micro, and household data.
2. Part 2 examines the effect of AIDS on economies.
3. Part 3 explores economic returns to actions that prevent HIV infections. The links between income and AIDS prevalence are complex and poorly understood. Between continent comparisons indicate that HIV prevalence increases as income inequality increases. About 95 percent of HIV positive cases are in less developed countries. Factors other than poverty, such as war, health system, urbanization, mobility, and level of education, could also impact HIV prevalence. HIV/AIDS seems to decrease savings, disposable income, staff, and life expectancy, and increase training costs and health costs. In South Africa, life expectancy will decrease 18 to 25 years due to AIDS-related deaths. HIV/AIDS also affects a business’s labor force, customer base, and reputation. Lastly, there is a high rate of return for HIV/AIDS prevention activities. Estimates of the rates of return for HIV prevention activities are compared to returns for other investments in the health sector and elsewhere. The case study for calculating rates of return was Thailand; details of the calculations are included in the appendix. Depending on the situation (medical expenditure, income loss, or deaths averted), the rate of return for HIV/AIDS prevention activities ranges from 12 percent to 380 percent annually. This paper does not focus on MFIs and HIV, but provides an overview of the AIDS epidemic.

Length: 24 pages (including appendix and figures)
Type of file: PDF