Umeå Economic Studies,
Umeå University, Department of Economics

Abstract: In spite of increased awareness of HIV/AIDS and the lack of retroviral drugs, unprotected casual sex is still widespread in many HIV infected countries. In this paper, a two-period model for sexual decisions under uncertainty is developed. The results suggest that uncertainty of future health may be an important factor driving unsafe sex practices in countries in which access to HIV drugs is limited. Furthermore, the more efficient HIV treatment becomes, the more important will health related interventions become. The results support the empirical finding of a weak link between sexual behavior, HIV frequency and HIV knowledge in poor countries, and suggest that AIDS policy needs to be calibrated to fit within different social contexts.

Keywords: HIV/AIDS; sexual behavior; uncertainty; risk aversion; health risk

JEL-codes: D81; D91; I10

37 pages, March 18, 2009

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