The economic effects of lowering HIV incidence in South Africa: A CGE analysis

South Africa has the highest UNAIDS HIV severity rating: “generalised pandemic”. A country with this classification requires public health interventions aimed at the general population. This paper investigates the efficacy of one such policy, examining the national economic effects of an increase in condom use. We use an epidemiological model to estimate the impact of condom use on HIV infections distinguished by age, gender and race. The epidemiological model's outputs are input to an economy-wide dynamic general equilibrium model that distinguishes labour market participants by age, gender, race, labour market status and HIV status. We find that the programme generates gains in real consumption with a present value of approximately USD $30billion, or USD $2000 per household.