nep-afr New Economics Papers
on Africa
Issue of 2007‒05‒12
25 papers chosen by
Suzanne McCoskey
Foreign Service Institute, US Department of State

  1. Why Is Africa Constrained from Spending ODA? By Terry McKinley
  2. Debating the Provision of Basic Utilities in Sub-Saharan Africa: a Response to Nellis By Kate Bayliss; Ben Fine
  3. The Height of Women in Sub-Saharan Africa: the Role of Health, Nutrition, and Income in Childhood By Yoko Akachi; David Canning
  4. Boda-bodas Rule: Non-agricultural Activities and Their Inequality Implications in Western Kenya By Jann Lay; George Michuki M’Mukaria; Toman Omar Mahmoud
  5. Globalization and Marginalization in Africa: Poverty, Risk and Vulnerability in rural Ethiopia By Stefan Dercon (QEH)
  6. Policy Brief: How pro-poor is the South African Health System? By Ronelle Burger
  7. Health and wellbeing in Udaipur and South Africa By Anne Case; Angus Deaton
  8. A series of national accounts-consistent estimates of poverty and inequality in South Africa By Servaas van der Berg; Ronelle Burger; Rulof Burger; Megan Louw; Derek Yu
  9. Root Causes of African Underdevelopment By Sambit Bhattacharyya
  10. Governance of Innovation in the Different Countries of the World By Manuel, Eduardo
  11. The Economics of HIV/AIDS in Low-Income Countries: The Case for Prevention By David Canning
  12. Post-transition poverty trends based on an alternative data source By Servaas van der Berg; Megan Louw; Derek Yu
  13. New Actors in Health Financing: Implications for a Donor Darling By Denis Drechsler; Felix Zimmermann
  14. Convergence and economic Integration in Africa: case of cfa countries By DRAMANI, Latif
  15. Does Female Schooling Reduce Fertility? Evidence from Nigeria By Una Okonkwo Osili; Bridget Terry Long
  16. Bribery in Health Care in Peru and Uganda By Jennifer Hunt
  17. SOCIAL CAPITAL and the RWANDAN GENOCIDE A Micro-Level Analysis By Shanley Pinchotti; Philip Verwimp
  18. Assessing the Economic Impact of HIV/AIDS on Nigerian Households: A Propensity Score Matching Approach By David Canning; Ajay Mahal; Kunle Odumosu; Prosper OkonkwoZhiwei
  19. Agricultural Outputs and Conflict Displacement: Evidence from a Policy Intervention in Rwanda By Florence Kondylis
  20. Vulnerability: a micro perspective By Stefan Dercon (QEH)
  21. Moral Hazard and the Composition of Transfers: Theory with an Application to Foreign Aid By Amegashie, J. Atsu; Ouattara, Bazoumanna; Strobl, Eric
  22. National Innovation Systems in Angola and Mozambique By Manuel, Eduardo
  23. Electricity Reforms in Senegal: A Macro–Micro Analysis of the Effects on Poverty and Distribution By Dorothée Boccanfuso; Antonio Estache; Luc Savard
  24. Alternative Use Systems for the Remaining Cloud Forest in Ethiopia and the Role of Arabica Coffee - A Cost-Benefit Analysis By Reichhuber, Anke; Requate, Till
  25. Epidemics and Economics By David E. Bloom; David Canning

  1. By: Terry McKinley (International Poverty Centre)
    Keywords: Poverty, Africa, ODA
    Date: 2007–05
  2. By: Kate Bayliss (Independent Consultant, Brighton, UK); Ben Fine (Professor of Economics, SOAS, University of London)
    Keywords: Sub-Saharan Africa, Nellis, Poverty
    Date: 2007–04
  3. By: Yoko Akachi; David Canning (Harvard School of Public Health)
    Abstract: Most of the variation in height across countries in Sub-Saharan Africa is due to fixed effects, however, we find that variations in cohort height over time are sensitive to changes in infant mortality rate, GDP per capita, and protein intake, both at birth and in adolescence.
    Keywords: Infant Mortality, Nutrition, Women’s Height, Stature, Sub-Saharan Africa
    Date: 2007–05
  4. By: Jann Lay (Kiel Institute for the World Economy, Germany); George Michuki M’Mukaria (GIGA German Institute of Global and Area Studies); Toman Omar Mahmoud (Kiel Institute for the World Economy, Germany)
    Abstract: Engagement in non-agricultural activities in rural areas can be classified into survival-led or opportunity-led. Survival-led diversification would decrease inequality by increasing the incomes of poorer households and thus reduce poverty. By contrast, opportunity-led diversification would increase inequality and have a minor effect on poverty, as it tends to be confined to non-poor households. Using data from Western Kenya, we confirm the existence of the differently motivated diversification strategies. Yet, the poverty and inequality implications differ somewhat from our expectations. Our findings indicate that in addition to asset constraints, rural households also face limited or relatively risky high-return opportunities outside agriculture.
    Keywords: Income diversification, non-agricultural activities, inequality, poverty, sub-Saharan Africa, Kenya
    JEL: Q12 O17 I31
    Date: 2007–04
  5. By: Stefan Dercon (QEH)
    Abstract: Increased openness is seen by some as a panacea for development while for others it is a recipe for disaster for the poor. Using the example of Ethiopia, this paper discusses some of the key challenges faced by some of the poorest African countries to beneficially engage in the world economy. Worldwide income growth has largely bypassed many African countries, and large parts of their populations risk increasing marginalization. This paper documents the challenges faced by one of these countries, Ethiopia, by highlighting first the impact of a first wave of liberalization in the early 1990s, using the evidence from a rural panel data set. It was found that while liberalization had some positive effects in this particular period, the benefits were largely confined to those with good assets, not least in terms of geography and road infrastructure. In subsequent years, access to infrastructure seems to have been causing even further growth and poverty divergence within rural Ethiopia. This evidence suggests that access to better infrastructure and communications will be key to have beneficial effects of further liberalization and engagement with the world econoy. Finally, we find some evidence that liberalization has shifted the nature of risks towards a higher incidence of market related risks with an impact on households, such as sudden output price collapses or input price increases. While it is not possible to infer from this that vulnerability to poverty has necessarily increased, one would need to recognize that these shifts in risk will require different responses from households themselves and from policy makers.
  6. By: Ronelle Burger (Department of Economics, University of Stellenbosch)
    Abstract: This chapter investigates how effective recent changes in the South African public health care system have been in transforming the inequitable system inherited from the apartheid-era government. How has post-apartheid budget reallocations, decentralisation, the elimination of primary health care user fees and expansion of the network of clinics changed the incidence of spending and the quality of services provided? Have these changes benefited the poor? The results from research conducted indicate that the distribution of health spending on hospitals and clinics is driven by utilisation patterns. The decision by the affluent to opt-out of the public health system means that the most affluent receive a dramatically smaller proportion of the budget than the rest. There is, however, not much evidence of pro-poor targeting for the rest of the income distribution. However, in terms of spending equity, South Africa compares well with other developing countries. It is clear that health services have become more accessible and more affordable for the poor. Yet, the government is still far from achieving universal access and the desired degree of equity. In addition, there are concerns regarding the quality of services provided by public sector clinics and hospitals. Dissatisfaction among users of public sector services has increased and complaints include long waiting times, staff rudeness and problems with the availability of drugs.
    Keywords: Fiscal incidence, South Africa, health
    JEL: H51 I18
    Date: 2007
  7. By: Anne Case (Princeton University); Angus Deaton (Princeton University)
    Abstract: This paper presents a descriptive account of health and economic status in India and South Africa – countries in very different positions in the international hierarchy of life expectancy and income. The paper emphasizes the lack of any simple and reliable relationship between health and wealth between and within our sites in rural Rajasthan, in a shack township outside of Cape Town, and in a rural South African site that, until 1994, was part of a Bantustan. Income levels across our sites are roughly in the ratio of 4:2:1, with urban South Africa richest and rural Rajasthan poorest, while ownership of durable goods, often used as a short-cut measure or check of living standards, are in the ratio of 3:2:1. These differences in economic status are reflected in respondents’ own reports of financial status. People know that they are poor, but appear to adapt their expectations to local conditions, at least to some extent. The South Africans are taller and heavier than the Indians—although their children are no taller at the same age. South African self-assessed physical and mental health is no better, and South Africans are more likely to report that they have to miss meals for lack of money. In spite of differences in incomes across the three sites, South Africans and Indians report a very similar list of symptoms of ill-health. Although they have much lower incomes, urban women in South Africa have fully caught up with black American women in the prevalence of obesity, and are catching up in terms of hypertension. These women have the misfortune to be experiencing many of the diseases of affluence without experiencing affluence itself.
    Date: 2006–01
  8. By: Servaas van der Berg (Department of Economics, University of Stellenbosch); Ronelle Burger (Department of Economics, University of Stellenbosch); Rulof Burger (Department of Economics, University of Stellenbosch); Megan Louw (Department of Economics, University of Stellenbosch); Derek Yu (Department of Economics, University of Stellenbosch)
    Abstract: This paper makes a unique contribution to the South African literature in combining data from an alternative source of household survey data – the All Media and Product Survey (AMPS) – with national accounts income trends for this country, in the recent tradition of research on the world distribution of income performed by Bhalla (2002), Karshenas (2003), Bourguignon and Morrisson (2002), Sala-i-Martin (2002a; 2002b), and Quah (2002), amongst others. Its usefulness lies in arriving at alternative estimates of post-transition poverty and inequality that are consistent with the story that national accounts and other official data collectively tell us about the path of the South African economy during the post-transition period. While the method of scaling survey distribution data by national accounts means is somewhat controversial, it is not clear that the distributional trends obtained using the post-transition sets of either the IESs or the Population Censuses are more reliable, given serious deficiencies in both sources of data. Adjusted distributions yield lower levels of poverty and a stronger decline in poverty during the second half of the period than the figures obtained from the raw AMPS data. While the levels of poverty obtained using adjusted income distributions are artificially low, the derived downward trend is supported by a number of official data sources.
    Keywords: Poverty, Inequality, Income distribution Analysis, South Africa
    JEL: D6 I32 I38
    Date: 2007
  9. By: Sambit Bhattacharyya (RMIT University, Melbourne, Australia)
    Abstract: What is the root cause of Africa’s current state of under-development? Is it the long history of slave trade, or the legacy of extractive colonial institutions, or the fallout of malaria? A precise answer still eludes us. This paper investigates the relative contribution of these historical factors using an instrumental variable approach. The results show that malaria matters the most and all other factors are statistically insignificant. The mechanism through which malaria impacts economic performance is demonstrated by a strong negative relationship between malaria and national savings and a two period overlapping generation model. The model shows that high malaria incidence adversely affects growth by increasing both mortality and morbidity. Increased mortality from malaria induces households to increase current consumption and save less for the future. Increased morbidity on the other hand adversely affects labour productivity. The combined impact of these two effects is a slowdown of capital accumulation and economic growth.
    Keywords: Malaria; Colonial Institutions; Slave Trade; Economic Development
    JEL: O11 O41 O57 N0
    Date: 2007–04
  10. By: Manuel, Eduardo
    Abstract: This paper has as objective to approach the "Governance of Innovation in the different countries of the World", using information from World Economic Forum. The improve of cooperation between richest and poorest countries and between the poorest countries (between South Africa and Zambia, for example) is necessary to extract lessons and so to solve problems at level of what is necessary, what is missing and what is falling at the progress of nations more poor in knowledge that is cause of low level of innovation and economic development.
    Keywords: Governance; Innovation; Governance of Innovation
    JEL: O38 O57 O39 M29 O31
    Date: 2006–10–09
  11. By: David Canning (Harvard School of Public Health)
    Abstract: There are two approaches to reducing the burden of sickness and death associated with HIV/AIDS: treatment and prevention. With limited resources, should the focus be on prevention or treatment? I discuss the range of prevention and treatment alternatives, examine their cost effectiveness, and consider various arguments that have been raised against the use of cost-effectiveness analysis in setting priorities for health. I conclude that promoting AIDS treatment using antiretrovirals in resource-constrained countries comes at a huge cost in terms of avoidable deaths that could be prevented through interventions that would substantially lower the scale of the epidemic.
    Date: 2006–06
  12. By: Servaas van der Berg (Department of Economics, University of Stellenbosch); Megan Louw (Department of Economics, University of Stellenbosch); Derek Yu (Department of Economics, University of Stellenbosch)
    Abstract: This paper analyses a previously unused source of data – the All Media and Product Survey (AMPS) – to arrive at alternative estimates of the post-transition poverty path. The motivations for using this non-official data source are twofold: concern over the comparability of the existing official post-transition datasets – the Income and Expenditure Survey (IES) and Population Census – and a desire to extend analysis of poverty trends beyond 2001. While official data sources are generally preferred for purposes of poverty analysis, the IES and Census collect data at long (five or ten year) intervals, and additional years pass before these datasets become available to the public. The expenditure data contained in the General Household Survey is available annually, although data are captured in a small number of categories that are not very conducive to analysis at the lower end of the income distribution. Analysis on AMPS data confirms the large decline in poverty implied by an increase of R18 billion (in 2000 Rand) in social grant payments between 2000 and 2004. The direction of this trend is consistent with recent research findings based on more frequently analysed data sources, including the work done by Agüero, Carter and May (2005), Seekings (2006), and Meth (2006).
    Keywords: Poverty, Inequality, Income distribution Analysis, South Africa
    JEL: D6 I32 I38
    Date: 2007
  13. By: Denis Drechsler; Felix Zimmermann
    Abstract: With concern about how to finance the Millennium Development Goals (MDGs) widespread, recent donor pledges to raise aid volumes are welcome. However, aid alone will not suffice – bringing in new actors and sources of development finance will be essential. In many developing countries, this is already happening, creating new opportunities and challenges for their governments and donors....
    Date: 2006–12
  14. By: DRAMANI, Latif
    Abstract: Ce papier étudie la convergence dans les économies des pays en développement, spécifiquement en Afrique dans les zones UEMOA et CEMAC à l’aide de la théorie de la convergence inspirée par les modèles de croissance endogène. La littérature récente apporte de nouvelles pistes de recherches sur l’étude de la convergence des économies avec l’approche par la bêta-convergence, la sigma- convergence, la convergence stochastique ainsi que l’utilisation de l’analyse des données spatiales. En effet ces dernières années les études portant sur la convergence des économies utilisant la théorie de la convergence en l’occurrence celle de la bêta convergence et de la sigma convergence ont été améliorés avec la prise en compte des phénomènes spatiaux jusqu’alors négligés dans la spécification des modèles. L’objectif de cette étude est de mesurer avec une validation économétrique sur coupes transversales et sur données de panel un certain nombre d’hypothèses dont les principales sont la convergence des économies de la zone UEMOA et CEMAC à travers certaines variables économiques et budgétaires, l’existence des effets de débordements, ainsi que la recherche d’un sentier de croissance commun pour les économies de la zone. Les résultats que nous avons trouvés, montrent que le processus de convergence n’est pas uniforme dans la zone franc. En effet le processus de convergence et donc d’intégration est beaucoup plus accentué dans les pays de la zone UEMOA que ceux de la zone CEMAC. D’autre part la technique d’estimation du modèle de convergence conditionnelle a permis de mettre en évidence l’existence de variables clés permettant de maximiser la vitesse de convergence dans la zone. Une approche plus fine de la convergence, en utilisant les similarités par rapport aux facteurs de production, les similarités par rapport aux avantages naturelles, a permis de mettre en lumière la présence de club de convergence. L’étude a également révélé une convergence selon les périodes des pays produisant du Coton, du café ainsi que des pays côtiers. Ceci démontre que l’hypothèse d’un sentier commun de convergence est battue en brèche par les résultats de notre étude dans les pays de la zone Franc. L’analyse des effets spatiaux met en évidence l’existence d’effets inhibiteurs sur la vitesse de convergence. En effet l’effet frontière prise en compte a contribué à faire baisser la vitesse de convergence en moyenne de moitié sur la période après dévaluation, et du cinquième sur la période PAS.
    Keywords: Convergence; sigma convergence; convergence stochastique; données de panels; économétrie spatiale; co-intégration; intégration économique; convergence conditionnelle.
    JEL: H50 H52 F50 O11
    Date: 2007–04–30
  15. By: Una Okonkwo Osili; Bridget Terry Long
    Abstract: The literature generally points to a negative relationship between female education and fertility. Citing this pattern, policymakers have advocated educating girls and young women as a means to reduce population growth and foster sustained economic and social welfare in developing countries. This paper tests whether the relationship between fertility and education is indeed causal by investigating the introduction of universal primary education in Nigeria. Exploiting differences by region and age, the paper uses differences-in-differences and instrumental variables to estimate the role of education in fertility. The analysis suggests that increasing education by one year reduces fertility by 0.26 births.
    JEL: I2 J13 O10
    Date: 2007–04
  16. By: Jennifer Hunt (McGill University, NBER and IZA)
    Abstract: In this paper, I examine the role of household income in determining who bribes and how much they bribe in health care in Peru and Uganda. I find that rich patients are more likely than other patients to bribe in public health care: doubling household consumption increases the bribery probability by 0.2-0.4 percentage points in Peru, compared to a bribery rate of 0.8%; doubling household expenditure in Uganda increases the bribery probability by 1.2 percentage points compared to a bribery rate of 17%. The income elasticity of the bribe amount cannot be precisely estimated in Peru, but is about 0.37 in Uganda. Bribes in the Ugandan public sector appear to be fees-for-service extorted from the richer patients amongst those exempted by government policy from paying the official fees. Bribes in the private sector appear to be flat-rate fees paid by patients who do not pay official fees. I do not find evidence that the public health care sector in either Peru or Uganda is able to pricediscriminate less effectively than public institutions with less competition from the private sector.
    Keywords: corruption, bribery, governance, health care
    JEL: H4 K4 O1
    Date: 2007–04
  17. By: Shanley Pinchotti (KU Leuven); Philip Verwimp (Université Libre de Bruxelles)
    Abstract: This paper applies the theory of social capital to the unfolding of genocide in a Rwandan community located 50 km south of the capital. Using the concepts defined by Putnam, Coleman and Woolcock, we find that the activities of political parties, civil war in the north of the country and the use of coercion and violence inside the community weakened existing ties between members of the two ethnic groups, Hutu and Tutsi. Within these groups however, social ties were strengthened to a degree where collective action against the minority group became a feasible option. In this process, we analyse the role of a small group of key players in the community and link their role with their political and economic status. The genocide is thus situated and interpreted in the social fabric of a Rwandan community. The paper is the result of intensive field work in Rwanda.
    Date: 2007–03
  18. By: David Canning; Ajay Mahal; Kunle Odumosu; Prosper OkonkwoZhiwei (Harvard School of Public Health)
    Abstract: We assess the impact of HIV/AIDS on individuals’ health care utilization and spending in the Oyo and Plateau states of Nigeria and income foregone from work time lost. Data was from a 2004 survey of nearly 1,500 households, including 482 individuals living with HIV/AIDS. Estimating the effect of HIV is complicated by the fact that our sample of HIV positive individuals is non-random; there are selection effects, both in acquiring HIV, and in being in our sample our HIV positive people, which was based on contacts through non-governmental organizations. To overcome this selection effect, we compare HIV positive people with a control group with similar observed characteristics, using propensity score matching. The matched control group has very different health and economic outcomes than a random sample of the population indicating that our HIV sample would not have had "average" outcomes even if they had not acquired HIV. HIV is associated with significantly increased morbidity, health care utilization, public health facility use, lost work time and increased time devoted to care-giving relative to outcomes in the control group. Direct health care costs and indirect income loss per HIV positive individual were 16,569 Naira, about 32% of annual income per capita in affected households. About 40% of these costs are income losses associated with sickness and care-giving. 15% of the cost of HIV is accounted for by public subsidies on health. The largest single economic cost, representing 45% of the total economic burden of HIV, are out of pocket expenses, mainly for health care.
    Keywords: HIV, Nigeria, Economic Impacts, Households, Direct Costs, Propensity Score
    Date: 2006
  19. By: Florence Kondylis (The Earth Institute at Columbia University)
    Abstract: In 1997 Rwanda introduced a re-settlement policy for refugees displaced during previous conflicts. We exploit geographic variation in the speed of implementation of this policy to investigate the impact of conflict-induced displacement and the re-settlement policy on household agricultural output and on skill spill-over mechanisms between returnees and stayers. We find that returns to onfarm labour are higher for returnees relative to stayers, although the evidence suggests that the policy contributed little additional effect to this differential. More speculatively, these differentials suggest that, upon return from conflict-induced exile, returnees are more motivated to increase their economic performance.
    Date: 2007–04
  20. By: Stefan Dercon (QEH)
    Abstract: High downside risk to income and livelihoods is part of life in developing countries. Climatic risks, economic fluctuations, and a large number of individual-specific shocks leave these households vulnerable to severe hardship. The paper explores the links between risk, vulnerability and poverty, taking a micro-level perspective. Risk does not just result in variability in living standards. There is increasing evidence that the lack of means to cope with risk and vulnerability is in itself a cause of persistent poverty and poverty traps. Risk results in strategies that avoid taking advantage of profitable but risky opportunities. Shocks destroy human, physical and social capital limiting opportunities further. The result is that risk is an important constraint on broad-based growth in living standards in many developing countries. It is a relatively ignored part when designing anti-poverty policies and efforts to attain the Millennium Development Goals. The paper discusses conceptual issues, the evidence and the policy implications.
  21. By: Amegashie, J. Atsu; Ouattara, Bazoumanna; Strobl, Eric
    Abstract: The paper presents a theoretical and empirical analysis of a donor’s choice of the composition of unrestricted and in-kind/restricted transfers to a recipient and how this composition is adjusted in response to changes in the moral hazard behavior of the recipient. In-kind or restricted transfers may be used, among others, to control a recipient’s moral hazard behavior but may be associated with deadweight losses. Within the context of foreign aid, we use a canonical political agency model to construct a simple signaling game between a possibly corrupt politician in a recipient country and a donor to illustrate the donor’s optimal choice of tied (restricted) and untied foreign aid. We clarify the condition under which a reduction in the recipient’s moral hazard behavior (i.e., improvement in the level of governance) leads to a fall in the proportion of tied aid. We test the predictions of our theoretical analysis using data on the composition of foreign aid by multilateral and bilateral donors.
    Keywords: tied foreign aid; governance; moral hazard; political agency; restricted transfer.
    JEL: F35 D73 I38
    Date: 2007–04–12
  22. By: Manuel, Eduardo
    Abstract: This work has as objective to approach the theme “National Innovation Systems in Angola and Mozambique”. We concluded that Angola and Mozambique need to define economics policy that have as objective to promote the growth of their GDP per capita and human development. Both government need to define strategies for promotion the internet access for enlarging of knowledge about others cultures that can help on promotion of innovation, and these government should to promote the enlarging of investigators in R&D for also promotion of innovation on divers areas such health, education, etc. And both government should not forget to promote the increase of rate of adult alphabetization that pass for promotion to access of education for people more necessitated and should not forget to promote of protection of intellectual property, and so, firms and companies can employ skilled people and through use of technology advanced can promote innovation and commercialize that, and this skilled people can too discovery and develop better technology and improve innovation system for development of the both countries on globalization era.
    Keywords: Innovation; National Innovation System
    JEL: O34 M19 O57 O32 O33 O14 O31
    Date: 2006–05–15
  23. By: Dorothée Boccanfuso (GREDI, Faculte d'administration, Université de Sherbrooke); Antonio Estache (World Bank and, the European Centre for Advanced Research in Economics and Statistics at the Free University of Brussels); Luc Savard (GREDI, Faculte d'administration, Université de Sherbrooke)
    Abstract: This paper uses a computable general equilibrium (CGE) macro-micro model to explore the distributional effects of price reform in the electricity sector of Senegal. In the first part of the paper we analyze the distribution of electricity in Senegal by income quintiles, between 1995 and 2001. The analysis demonstrates that poor and rural households are not the main beneficiaries of the expanded network. The results of the CGE application show that direct price increases have a minimal effect on poverty and inequality, whereas the general equilibrium effects are stronger and negative. Moreover, compensatory policies tested can help attenuate some negative effects.
    Keywords: computable general equilibrium model, micro-simulation, poverty analysis, income distribution, privatization, water utilities
    JEL: D58 D31 I32 L33 L93
    Date: 2007
  24. By: Reichhuber, Anke; Requate, Till
    Abstract: This paper presents a cost-benefit analysis of three different use systems for the remaining cloud forests in Ethiopia which at present are being depleted at a rate of 8% per year. These use systems are traditional conversion to crop land, sustainable management of the forest (e.g. by growing high-quality semi-forest coffee), and strict protection. We find that conversion to cropland yields the highest net present income value for the local population, and at discount rates of 10% is even in the best interests of the country. For discount rates of at 5% or lower, sustainable forest use is in the best interests of the country. Taking into account the global benefits of biodiversity conservation and carbon storage, sustainable forest management yields the highest total economic value.
    Keywords: cost-benefit analysis, biodiversity, coffee, Ethiopia
    Date: 2007
  25. By: David E. Bloom; David Canning (Harvard School of Public Health)
    Abstract: This paper discusses the links between income and infectious disease epidemics and asks how such links are affected by changing global circumstances. Having money and living in a prosperous society protects individuals against health setbacks in general and epidemics in particular. Healthy people get more education, are more productive in the work force, attract foreign investment, and save more. As better health leads to de-creases in family size, the consequent change in a country's age structure can boost eco-nomic growth. Epidemics can obstruct these effects by changing expectations about how well an economy will function and by deterring investment and tourism. In many instances, the immediate costs of an epidemic are apparent, while the long-term costs are unclear. However, when we include the value of human life in the cost, it becomes clear that epidemics are extremely costly. Preventing epidemics requires overcoming a range of obstacles, as does responding to an epidemic once it begins. Globally, long-term vulnerability to epidemics may decrease as development standards rise, but a more highly interconnected world may actually promote the occurrence of infectious disease epidemics.
    Date: 2006–06

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