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Melvin Stephens, Estimating Program Benefits

The financial impact of HIV/AIDS on poor households in South Africa

Publication Abstract

Collins, D.L., and Murray Leibbrandt. 2007. "The financial impact of HIV/AIDS on poor households in South Africa." AIDS, 21(Suppl7): S75-S81.

Background: Rising mortality rates caused by HlV/AlDS in South Africa have substantial and lingering impacts on poor households. Methods: This is a descriptive paper using a new dataset of daily income, expenditure and financial transactions collected over a year from a total of 181 poor households in South African rural and urban areas. One of the key pathways through which HlV/AlDS impacts on household wellbeing is through the socioeconomic impacts of death, which this dataset is especially useful in quantifying. Results: The key impacts of death on households are funerals and the loss of income. Funerals often cost up to 7 months of income. Nearly all households in the sample attempt to cover such costs by holding a portfolio of funeral insurance. Despite these efforts to insure against funeral costs, 61% of households are underinsured against the cost of a funeral. Nearly half the sample households are dependent on a regular wage earner, and another quarter are dependent on a grant recipient. Eighty per cent of these households would lose over half of their monthly income should the highest income recipient in the household die. Even by selling liquid assets, only one third of the sample households would be able to maintain their pre-death living standards for a year or more. Conclusion: Death poses substantial and lingering burdens from the funerals that surviving household members need to finance and the ongoing loss of income once brought into the household by the deceased. These costs pose so great a threat to households that they dominate household saving and insurance behavior. (c) 2007 Wolters Kluwer Health.

DOI:10.1097/01.aids.0000300538.28096.1c (Full Text)

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