Measuring Impacts of HIV/AIDS on African Rural Economies

1. Measuring Impacts of HIV/AIDS on African Rural Economies T.S. Jayne Michigan State University Informal presentation at HSRC, Johannesburg July 13, 2004 Michigan State University, Dept. of Agricultural Economics

2. Effective Response to HIV/AIDS Requires Knowledge of How Households Respond to the Disease • Three-pronged attack: • Prevention • Treatment • Mitigation • All depend on solid information on how individuals and households adapt and respond • 20+ years after the onset of the disease, the empirical foundation for the design of programs is still weak Michigan State University, Dept. of Agricultural Economics

3. Objectives • To understand how affected households respond/adapt to prime-age mortality • To measure impacts on • Family size and composition • Crop production • Non-farm income • Asset levels • To consider implications for policy Michigan State University, Dept. of Agricultural Economics

4. Characteristics of the national samples Michigan State University, Dept. of Agricultural Economics

5. Michigan State University, Dept. of Agricultural Economics

6. What have we learned so far about measuring impacts? Michigan State University, Dept. of Agricultural Economics

7. Importance of panel (longitudinal) analysis Michigan State University, Dept. of Agricultural Economics

8. Importance of panel (longitudinal) analysis Household income 45 40 35 30 25 Afflicted hhs 20 Unafflicted hhs 15 10 5 0 Pre-Mortality Post-Mortality Michigan State University, Dept. of Agricultural Economics

9. Finding #2 Afflicted households/individuals are not random • Early 1990s: positively correlated with income, wealth, education, mobility • More recent evidence: increasingly concentrated among the poor Michigan State University, Dept. of Agricultural Economics

10. Per Capita Income Status of Afflicted Households (ex ante) - Kenya Michigan State University, Dept. of Agricultural Economics

11. Per Capita Income Status of Afflicted Households - Zambia Michigan State University, Dept. of Agricultural Economics

12. Finding #3: Certain factors affect the magnitude of impacts on households • Strong evidence that impacts depend on: • Initial level of household vulnerability (assets, wealth) • Sex of the deceased • Position in household of deceased • Ability of household to attract new members • Characteristics of adults remaining in household (e.g, skills, education level) Michigan State University, Dept. of Agricultural Economics

13. Gender Effects of Mortality on Crop Cultivation • In Kenya: • Death of male head  - 0.9 acre to cash crops (e.g., sugarcane, horticulture) • Death of female head  - 1.8 acre to cereals, tubers Michigan State University, Dept. of Agricultural Economics

14. Effects of Death on Farm Production Sensitive to Gender, Position in HH • Death of Male hh-head  68% reduction in value of crop output • Death of Female head/spouse  less dramatic but still negative effects • Why Effects of Male Prime Age Mortality are Greater? • Loss of female ag. labor to caregiving • Loss of higher-return crops • Death of other hh member – insignificant effects on ag. Michigan State University, Dept. of Agricultural Economics

15. Finding #4 • In some countries, the majority of prime-age mortality is among older sons / daughters, not heads / spouses Michigan State University, Dept. of Agricultural Economics

16. Position in household of deceased p.a. individuals Non-afflicted M F Afflicted M F Kenya: head/spouse other 24 76 34 67 59 41 27 73 Malawi: head/spouse other 38 62 55 45 54 46 52 48 Mozambique: head/spouse other 60 40 68 32 40 60 13 87 Rwanda: head/spouse other 47 53 53 47 56 44 44 56 Zambia: head/spouse other 50 50 58 42 24 76 15 85 Michigan State University, Dept. of Agricultural Economics

17. Finding 5: Effects More Severe on the Poor • Very few significant effects detected among households in top half of asset distribution • Effects on ag production and non-farm income were larger and more highly significant among the poor Michigan State University, Dept. of Agricultural Economics

18. Implications - I • Not clear that afflicted households need or should be urged to use: • labor-saving crop technologies • Why? • Afflicted hhs, on average, have as much labor and land/labor ratios as non-affected hhs • crops / techniques that reduce labor input per acre may sacrifice income and food produced per acre • Must take into account population density and extent of under-employed labor Michigan State University, Dept. of Agricultural Economics

19. Population Size, 2000 vs. 2025 (projected)Seven Most Highly Afflicted Countries 20 18 16 14 millions 12 10 2000 8 2025 6 4 2 0 Males < 20 Males 20-59 Females < 20 Females 20-59 Michigan State University, Dept. of Agricultural Economics

20. Implication - II • Not clear that afflicted households should be urged to grow: • “more nutritious” foods • Why? • Crops that maximize nutrition / kg produced ≠ • maximize nutrition / acre or income / acre -- need to take account of which crops provide greatest return to land / labor in a given area Michigan State University, Dept. of Agricultural Economics

21. Nutritional units / kg produced Kgs produced per acre Nutritional units per acre Crop X 10 100 1,000 Crop Y 5 250 1,250 Michigan State University, Dept. of Agricultural Economics

22. Summary • Adult mortality’s greatest effects are: • On the relatively poor • When male head dies • When death is other than the hh head/spouse, the household is better able to draw back other members to help the hh adjust Michigan State University, Dept. of Agricultural Economics

23. What are we learning about “community effects”: • What determines community “resilience”? • Local institutions/traditions influence resilience • Example of sugarcane outgrower programs in Kenya • Land tenure / land inheritance • H0: resilience is influenced by • Initial level of poverty in community • Rules governing women’s rights and access to resources • e.g. can widows retain land after husband’s death? • Matrilineal vs. patrilineal effects Michigan State University, Dept. of Agricultural Economics

24. Need for appropriate balance between: • Investing in long-term productivity growth (education, infrastructure, markets) vs • Targeted assistance to affected HHs • Pro-poor development is important to mitigate economic effects of HIV/AIDS Michigan State University, Dept. of Agricultural Economics

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26. 1997 2000 Difference Households not afflicted x1 x2 Afflicted households y1 y2 difference “Difference-in-Difference” Approach )x )y )y - )x Michigan State University, Dept. of Agricultural Economics

27. Adult Mortality Rates - Women Michigan State University, Dept. of Agricultural Economics

28. Adult Mortality Rates - Men Michigan State University, Dept. of Agricultural Economics

29. Michigan State University, Dept. of Agricultural Economics