The HIV Anticaptory Saving Motive: An Empirical Analysis in South Africa

CentER Discussion Paper Series No. 2007-51

19 Pages Posted: 5 Sep 2007

See all articles by Gijs van de Kuilen

Gijs van de Kuilen

Tilburg University

Judith Lammers

University of Amsterdam; Tilburg University - Center for Economic Research (CentER)

Date Written: June 2007

Abstract

This paper studies the effect of the HIV/AIDS epidemic on saving behaviour. Two important characteristics of HIV result in opposing forces on savings: mortality increases, which reduces savings, and long-term illness risk increases, which enhances savings. We use a two period life-cycle model with uncertain lifetime including perceived HIV contamination risk to illustrate both the opposing effects of the HIV epidemic on individual savings and test the predictions of our model with data obtained from an economic experiment with real monetary incentives performed in South Africa. The empirical results show that increased mortality decreases the amount of savings and that having a high perception of HIV contamination risk increases savings. The latter effect confirms the HIV anticipatory saving hypothesis.

Keywords: HIV/AIDS, saving behavior, illness risk, mortality, life-cycle model, time preferences

JEL Classification: D12, D91, E21, I12

Suggested Citation

van de Kuilen, Gijs and Lammers, Judith, The HIV Anticaptory Saving Motive: An Empirical Analysis in South Africa (June 2007). CentER Discussion Paper Series No. 2007-51. Available at SSRN: https://ssrn.com/abstract=1012244 or http://dx.doi.org/10.2139/ssrn.1012244

Gijs Van de Kuilen (Contact Author)

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC Noord-Brabant 5000 LE
Netherlands

Judith Lammers

University of Amsterdam ( email )

Spui 21
Amsterdam, 1018 WB
Netherlands

Tilburg University - Center for Economic Research (CentER) ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
43
Abstract Views
568
PlumX Metrics