Assistant Professor of Economics Erick Gong delivered a talk in the Franklin Environmental Center on Oct. 25 titled “Information, Income, and the HIV/AIDS epidemic in sub-Saharan Africa.” The talk was presented as part of the Carol Rifelj Faculty Lecture Series, and addressed the HIV/AIDS epidemic in sub-Saharan Africa, which afflicts 25.5 million of people who live there (36.7 million people are infected worldwide). The issue is so widespread that the task of preventing further infection is daunting. Gong explored the current situation and possible solutions to the crisis.
One common belief Gong highlighted in his presentation is that increased education and access to HIV testing will result in safer sexual behaviors and lead people to seek treatment, but he cited a study which indicated that this theory is only partially true. He noted that participants who frequently engaged in high risk sexual behaviors and then discovered they were HIV negative showed a dramatic decrease in unprotected sex. However, the same study indicated that low-risk participants, such as those in long-term relationships, dramatically increased their engagement in unprotected sex when they tested as HIV positive. Gong called this a “negative externality,” one which doesn’t necessarily negate the usefulness of education and HIV testing but certainly argues that education and testing alone cannot solve the problem.
Another prevalent theory that Gong spoke about is that countries with higher income per capita will have fewer cases of HIV because people can afford treatment. Gong pointed out, however, that the most effective treatment, Antiretroviral Therapy (ART), is often either provided free of cost by the government or is unavailable regardless of income due to supply issues. Likewise, research has found that there is no correlation between per capita income and HIV prevalence in the sub-Saharan African countries Gong cited in his study.
Rather than look at income, Gong hypothesized a correlation between HIV prevalence and a concept known as “income volatility.” Income volatility refers to negative income shocks, such as losing a job or having to pay for an expensive medical procedure, specifically in countries without the infrastructure for what Gong calls “consumption smoothing”, or programs such as those created by credit and insurance companies that generally negate drastic income fluctuation.
People living without consumption smoothing methods respond to negative income shocks by pulling children out of school to join the labor pool, selling valuable assets, and most importantly to Gong’s research, engaging in transactional sex.
To broaden the scope of the studies and definitively prove the effect of income shocks, Gong and his team gathered data about 200,000 people from across sub-Saharan Africa. Direct communication with the study subjects was impossible, but Gong hypothesized that the most important economic shock for rural sub-Saharan Africans, who are primarily farmers, would be drought. Gong’s survey found that rural areas affected by drought showed a 20 percent increase in HIV prevalence.
After demonstrating this correlation between income volatility and HIV prevalence, Gong proposed that increased access to insurance, credit, and savings could be a partial solution to the spread of HIV. Without established savings programs, however, sub-Saharan African communities must save on their own. This presents a problem because saving money is difficult for most.
Gong suggested that saving could be made easier with combination of “mental accounting” and mobile banking. Mental accounting is an economic concept established by Nobel Prize winner Richard Thaler which dictates that people are likely to divide assets based on source or usage and are likely to treat their money differently accordingly. By incorporating this theory into mobile banking, Gong proposed a solution easily accessible to those at risk.
Gong tested his idea with a study of 627 Kenyan women, a combination of urban sex workers and rural widows, separated or divorced women, and unmarried heads-of-household without male support. The women were divided, regardless of their original category, into two test groups. One group did their banking as normal, while the other was given two accounts, with one specifically to be used for emergencies.
Gong found that the women who had the second account tended to decrease spending and increase savings. Gong referred to this as an increase in “highly liquid savings.” They then determined which women from the original test grouping experienced a negative shock since the start of the trial. Unmarried women coping with shocks were less likely to resort to transactional sex if they were part of the group with emergency funds. Furthermore, both the sex workers and the unmarried women coping with shocks had fewer STI symptoms if they had the second account, indicating a decrease in unprotected sex.
Anna Cox ’21, who attended the lecture, was pleased that the topic of HIV in her native Zimbabwe is getting academic attention. From a cultural perspective, however, she pointed out that more often than not men control family finances.
“It’s the men who would have the accounts,” she said. “Women are financially more bystanders.” Cox believes this fact may complicate the results of the saving study.
“There’s a lot less research done on men. It’s a big gap in our understanding [of HIV prevention],” he said. Research is like a ball of yarn,” Gong said. “The more I pull, the more untangled it becomes and the more I discover.” Gong’s research concluded that while not a definitive solution, the combination of mental accounting and mobile banking is an exciting solution to help curb the spread of HIV by combatting income shocks.
For more information on Gong’s research, visit his website at sites.google.com/site/erickgong.
