Examining the Impact of HIV-Prevalence on Economic Growth in Sub-Saharan Africa: A Panel Data Analysis
19 Pages Posted: 21 Jun 2012 Last revised: 25 Jul 2012
Date Written: June 19, 2012
In the current project, we want to study the impact of HIV prevalence rates on economic growth in 40 developing countries from Africa over the period of 2005 to 2009. We want to create a panel data set and use a fixed/random effect model to test the impact of HIV prevalence.
Most of the studies that exist in this field are case studies that deal with one country at a time. Or they are survey types of studies that do not go into regression and estimation techniques. Also, other authors have used computer simulation based production function models to examine this question.
We want to cover this gap in the existing literature with our paper through using a new method, which is the fixed-effect and random effect model. Therefore, our study will supplement the existing literature on the topic by providing empirical evidence/support for the adverse impacts of HIV prevalence on economic growth rates. The conventional literature on macroeconomic impacts of HIV states that “AIDS Has Little Net Macroeconomic Impact” (using per capita GDP as a metric). However, we prove that HIV prevalence (the percentage of the population living with HIV) has significant negative impacts on per capita GDP.
In the second phase of this study, we examine the impact of HIV on other macroeconomic variables, such as savings, consumption, labor supply, and investment.
Initial findings show that HIV prevalence has a negative impact on economic growth. This is true in all countries included in this study. On the other hand, countries with the highest level of income per capita show such an inverse association. Countries that have lower and medium per capita income do not show such an association.
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