HIV Breakthroughs and Risky Sexual Behavior
Published in: NBER Working Papers / (Cambridge, Ma: National Bureau of Economic Research, May 2004), p. 1-31
Recent breakthroughs in the treatment of HIV have coincided with an increase in infection rates and an eventual slowing of reductions in HIV mortality. These trends may be causally related, if treatment improves the health and functional status of HIV+ individuals and allows them to engage in more sexual risk-taking. The authors examine this hypothesis empirically using access to health insurance as an instrument for treatment status. The authors find that treatment results in more sexual risk-taking by HIV+ adults, and possibly more of other risky behaviors like drug abuse. This relationship implies that breakthroughs in treating an incurable disease like HIV can increase precautionary behavior by the uninfected and thus reduce welfare. They also show that, in the presence of this effect, treatment and prevention are social complements for incurable diseases, even though they are substitutes for curable ones. Finally, there is less under-provision of treatment for an incurable disease than a curable one, because of the negative externalities associated with treating an incurable disease.