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“The only thing necessary for these diseases to the triumph is for good people and governments to do nothing.”


The Economic Impact of HIV/AIDS

Mortality on Households in Thailand

Sumalee Pitayanon, Sukhontha Kongsin, and Wattana S. Janjareon


Reported data on AIDS cases in Thailand suggest that laborers and agricultural workers, who are generally the poorest and least educated, are the most susceptible to AIDS. The largest proportion of AIDS cases has been reported in Thailand’s northern provinces, mainly in rural areas. Because AIDS infects mainly adults of prime working age and no cure is available, an adult AIDS death can cause further immiseration of the poor in rural areas. This chapter measures and analyzes the economic impact of adult AIDS deaths on rural households in Thailand based on a primary survey of rural households in Chiangmai province, which has the highest number of reported AIDS

cases. It also investigates whether a linkage exists between adult AIDS mortality and low income and poverty in rural areas. The chapter also analyzes the ability of households’ of different socioeconomic status to cope and investigates whether an adult AIDS death differs from a death from other causes in terms of the economic impact on the household.

The study finds that the economic impact of an adult AIDS death is sizeable and significant despite all the coping strategies employed. The least able to cope were the poorest and least educated households engaged in agricultural work. The economic impact of an adult AIDS death was more severe than the impact of death from other causes. This is largely because AIDS infects a specific population, mainly those already disadvantaged and less able to cope with the resulting adversity.

Finally, the chapter suggests some policy implications of its findings, which are that existing government measures to alleviate rural poverty should be broadened and strengthened to include those rural households badly affected by an adult AIDS death

The Thai economy experienced impressive growth and underwent a series of structural shifts during  the last two decades. Real gross domestic product (GDP) grew by an average rate of 7 to 8 percent per year, which is high by any standards. The industrial sector expanded rapidly, with the manufacturing sector’s share in GDP rising from 14 percent in 1969 to 28 percent in 1992, surpassing the share of the agricultural sector, which dropped from 32 to 12 percent during the same period. Exports also grew substantially, from 15 percent of GDP in 1970 to 24 percent in 1980 and 36 percent in 1992. Per capita income rose from US$117 per year in 1969 to US$1,990 per year in 1992, taking Thailand off the list of developing countries and making it one of the newly industrializing countries.

Underlying this impressive growth and structural change is a serious imbalance between the rural and urban sectors. Even though it is declining, rural poverty is still substantial: the latest estimates indicate that in 1988 the incomes of 21 percent of the rural population were below the poverty line (Krongkaew, Tinakorn, and Suphachalasai 1992). Income inequality has increased, with the income share of the top 20

percent of the population increasing from 49 percent in 1975-76 to 55 percent in 1988-89 and the share of the lowest 20 percent declining from 6.0 to 4.5 percent during the same period. The group with the lowest income is concentrated in rural areas. On top of the rural population’s economic woes was the arrival of HIV/AIDS in the mid- 1980s and its rapid spread in Thailand’s rural areas in recent years. A report by the Ministry of Public Health (MOPH 1995) indicates that more than 60 percent of AIDS cases are among laborers and agricultural workers, who fall mainly in the low-income group. About

half of the reported cases are from the northern provinces, mainly the rural areas of Chiangmai, Chiangrai, Lampang, Lamphun, and Payao.

Because HIV/AIDS infects mainly adults during their sexually active years and is inevitably fatal, the socioeconomic implications of HIV/AIDS for development are immense. At the family level, the death of an adult during his or her sexually active years means the loss of a family member of prime working age  whose foregone income can adversely affect the welfare of surviving family members, especially if the deceased is also the family’s main breadwinner. This impact will be even worse if the family is a low-income family, because such families generally possess few resources, and are thus less able to cope with increased medical care costs and other related expenses, in addition to the foregone earnings of the ill family member.  Hence, HIV/AIDS not only increases mortality, but also immiserizes the poor and widens income inequality between the haves and the have nots.

The main objective of this study is to measure and analyze the economic impact of an adult HIV/AIDS-related death on a rural Thai household based on a primary data survey of rural households in Chiangmai province in northern Thailand, where reported HIV/AIDS cases are among the highest in Thailand. Specifically, the study measures the size and significance of the economic impact of an adult AIDS-related death on the household after all coping strategies have been employed. In addition, it investigates whether the economic impact of an adult AIDS death is different from the impact of an adult death resulting from another cause. To aid policy makers, the study also examines whether any link exists between adult AIDS mortality and low income and poverty in Thailand’s rural areas. Finally, the study analyzes the ability of households with different socioeconomic characteristics to cope with the adverse economic impact of an adult AIDS death so as to identify those least able to cope and most in need of.government assistance. The methodology employed in this study is similar to the World Bank studies in Africa by Ainsworth and Rwegarulira and Ainsworth and Over, which are reviewed and presented in Gertler (1993).

As this is the first economic impact study of an HIV/AIDS-related death on a family that is based on hard evidence in Thailand, it provides useful information to the government and other agencies on the spillover effects of an HIV infection and its direct threat to households’ welfare and survival. The evidence suggests that AIDS interventions can no longer focus primarily on the infected individual and ways of

preventing additional infection, but must also address the growing needs of those who are affected but uninfected, that is, the family and extended family, friends, and the whole community, because we now know that epidemic’s toll will be measured not only in terms of lives lost, but in the progressive circle of reduced functioning rippling through families, communities, and regions. This will be reflected not only in lost economic productivity, but in increasing social burdens, such as caring for children orphaned by the epidemic (John Kreniske n.d.).

The Current HIV/AIDS Situation in Thailand

AIDS was first reported in Thailand in 1984. By 1994 the cumulative number of reported AIDS patients totaled 15,665, of which 7,299, or 47 percent, were reported in 1994 and January 1995. In addition, 6,691 people were reported as infected with HIV. As these figures are based on a voluntary reporting system, whereby health institutions and physicians are encouraged to report cases anonymously to the public health authorities, as in most countries, the under-reporting of AIDS cases in Thailand is a problem.

Although the reported number of HIV/AIDS patients in Thailand may not be alarming, the number is expected to rise sharply in the near future. The Ministry of Public Health has estimated that the actual number of cumulative HIV cases at the end of 1993 was around 500,000 to 600,000. By the year 2000, if behavioral patterns do not change, this number will rise to 1.38 million, and the cumulative number of people with full-blown AIDS will be around 480,000. The total number of AIDS deaths until the year 2000 will be 450,000. The number of babies infected with HIV through their mothers is estimated at about 63,000 by the year 2000, with approximately 47,500 babies with full-blown AIDS.

The transmission routes of AIDS in Thailand have varied in importance at different stages of the epidemic. Early cases of reported AIDS were generally confined to homosexual men returning from abroad.  This was followed by an explosive spread of HIV infection among injecting drug users in 1987 and 1988.  The virus then spread to male and female sex workers and their clients, with the result that heterosexual

transmission became increasingly important. By 1991 many provinces started reporting cases of perinatal transmission. In 1985 Thailand initiated blood screening, and since 1989 every unit of donated blood has been screened for HIV. Currently, sexual intercourse accounts for more than 75.0 percent of AIDS cases, infection among injecting drug users accounts for 7.3 percent, and transmission from infected mothers to their babies is 7.1 percent.

In terms of prevalence rates, the highest rates are among injecting drug users (34.3 percent), followed by cheap prostitutes (27.0 percent), men with other sexually transmitted diseases (8.5 percent), expensive prostitutes (7.7 percent), pregnant women (1.8 percent), and recipients of donated blood (0.7.4 percent). These prevalence rates have increased among all the groups since 1989, especially among prostitutes (male and female), male outpatients with sexually transmitted diseases, and more recently,

pregnant women. However, HIV infection among intravenous drug users has leveled off since 1989.

More than 80 percent of HIV patients are aged fifteen to forty-four. The male to female ratio is about 7.5 to 1.0. More than 60 percent of those infected are employed as laborers and agricultural workers. About half of the reported cases are from the northern provinces of Chiangmai, Chiangrai, Lampang, Lamphun, and Payao, with Chiangmai having the largest reported number of cases as of January 31, 1995.

Data Collection

The data used in this study were generated from a field-based survey of households with recent experience of an HIV/AIDS-related death in five districts of Chiangmai province in northern Thailand, where the number of HIV/AIDS cases and deaths are among the highest in Thailand. The selection of households was based on hospitals’ records of HIV/AIDS-related deaths during 1992 and 1993. In this

way we eliminated households where the cause of death was unconfirmed. Because our study focuses on the potential economic impact of HIV/AIDS-related deaths on the family, only households in which the deceased were of working age were included.

From the hospital records we first grouped households by their district of origin. We then chose the five districts with the highest number of reported HIV/AIDS-related deaths and classified their households by subdistrict of origin. We only used subdistricts with at least three HIV/AIDS-related deaths for our study, and based on this criterion, selected twenty-seven subdistricts. Having weighed these subdistricts by their proportion of reported deaths from HIV/AIDS, we randomly selected 100 households from the total

for interviews. As we expected that some households might not cooperate and we might not be able to locate others, we prepared a list of substitute households to use in such cases. Because the total number of reported HIV/AIDS deaths in each chosen district was not large, all the cases from the hospital records were included either for interviewing or as substitutes. We interviewed a total of 116 households. Table 1 shows the distribution of households by district and subdistrict of origin..

Table 1.    Households Studied by Location and Type

Households with recent NIV/AIDS death:                                                                                        Control group

                TOTAL REPORTED                                                                                    Household with recent

                                                                                                                                          Non HIV/AIDS       Households

                                                                                                                                                Death                     with

                                                                                                                                            Reported                 no death

District   Subdistrict      by                   Selected    Prepared             Total                    by            Inter-          Inter_                                                                                                                                                             hospital     viewed         viewed

                                     Hospital            sample     substitutes        interviewed         

                                                                                                           In study

Mae Rim

                Don Kaew               6              3                    3                        3                              1              3                 3

                Salong                      5              3                    2                        3                              1              3                 3

                Rim Tai                   6              3                    3                        3                              2              3                 3

                Mae Ram                                4              3                    1                        3                              1              3                 3

                Kee Lhek                 3              3                    0                        3                              2              3                 3

                San Pong                 5              3                    2                        3                              1              3                 3

                Muang Kaew          6              4                    2                        4                              0              3                 4

                Rim Nua                  7              3                    4                        4                              0              3                 3

                      TOTAL            42            25                 17                       26                            8              24              25

San Sai

                San Na Meng          5              4                     1                       4                              2              3                 4

                Mae Fak Mai         10             7                     3                       7                              2              6                 7             

                Nong Jom                7              4                     3                       5                              1              4                 4

                Nong Harn              3              3                     0                       3                              3              3                 3

                Mae Fak                  5              3                     2                       4                              2              3                 3

                       TOTAL           30            21                   9                       23                            10            19              21


                San                          10            7                     3                       7                              1              6                  7


                Ton Pao                  5              4                     1                       4                              0              4                   4

                Huay Sai                 6              4                     2                       5                              3              4                   4

                   TOTAL               21            15                   6                       16                            4              14                15


                Nong Ku-wai          4              3                     1                       3                              1              3                    3


                Koon Dong             5              3                     2                       4                              0              3                     3

                Narn Prae                6              4                     2                       4                              1              3                     4

                Haang Dong            6              4                     2                       5                              3              3                     4

                Nong Tong              3              3                     0                       3                              2              3                     3

                Sob Mae Ka            3              3                     0                       3                              1              3                     3

                       TOTAL           27            20                  7                        22                            8              18                   20


                San Sai                     6              4                     2                       5                              0              4                      4

                Wieng                      19            10                  9                        10                            3              8                     10

                Mon pin                  10            5                    5                        6                              0              5                       5

                Mae Soon                7              4                     3                       4                              0              4                       4

                Mae Ngon               6              4                     2                       4                              1              4                       4

                     TOTAL             48            27                  21                      29                            4              25                    27

        GRAND TOTAL           168          108               60                       116                          34            100                 108



In addition to the households with recent experience of an HIV/AIDS-related death, our survey also included 100 households where a non-HIV/AIDS-related death had occurred and 108 households where no death had occurred as a control group. We obtained a list of non-HIV/AIDS deaths during 1992 and 1993 in the same districts and subdistricts as our target group from hospital records. As the reported number was so small, we asked our interviewers, who were public health officers in charge of the

subdistricts surveyed, to randomly select additional households in their subdistricts where a non-HIV/AIDS-related death had occurred since 1992 to make up the numbers. The interviewers also randomly selected 108 households with no deaths during 1992-94 in the same communities.

Our main survey tool was a structured questionnaire. We also incorporated a few open-ended questions to obtain additional qualitative information. To validate the information obtained from the household respondents, we asked community leaders in the districts and subdistricts covered in the survey

a set of open-ended questions. Finally, to cross-check the information given by adults, we designed a separate set of questions for children in the households surveyed.

Household interviews were conducted in March 1994 in cooperation with local public health workers in the districts and subdistricts covered by the study. Household respondents were the heads of households or others who could provide the information.

Because our survey was based on the records of hospitals under the jurisdiction of the Ministry of Public Health and the interviews were conducted in districts of the province with the highest reported number of HIV/AIDS cases, our findings must be interpreted with caution. The exclusion of other hospitals and districts raises the question of whether our findings are representative of the rest of the province and of the northern area of Thailand as a whole. However, a comparison of the characteristics of those who had died of AIDS in the northern areas of the country with those in Chiangmai province shows few major differences (table 2). The two main differences are in sex and average age of death. These can be explained by the purpose of our study, which limited the sample to working adults, and thus excluded children and women who did not work outside the home. As for the cause of infection, the smaller proportion of deaths

caused by sexual intercourse in our study is due to a large number of nonresponses to this question..

Table 2.  AIDS and ARC Mortality in Northern Thailand

Chiangmai Province and the Study

                                                                Northern Thailand                   Chiangnai Province                         Study

                Category                                (Sept.1984-Aug. 1993)           (Sept.1984-Aug.1993)              (March 1994)

AIDS and ARC Mortality                         783  (100%)                               238  (100%)            118 (100%)   


                Male                                             670 (86%)                                   204 (86%)                              113 (96%)

                Female                                          113 (14%)                                    34  (14%)                                  5 (4%)

Average Age (years)                                           28                                            28                                            30

Marital Status

                Single                                             405 (52%)                                  133 (56%)                                 61 (52%)

                Married                                          313 (40%)                                    70 (29%)                                 39 (33%)

                Other                                                60 (8%)                                      30 (13%)                                 18 (15%)


                Rural                                                771 (99%)                                 235 (99%)                             118 (100%)

                Urban                                                11 (1%)                                       2 (1%)                                    0

Cause of infection

                Intravenous drug user                  25 (3%)                                        7 (3%)                                 3 (3%)

                Sexual intercourse (hetero)         646 (82%)                                  166 (70%)            46 (39%)

                Perinatal                                            85 (11%)                                    44 (18%)              0

                No response                                    31 (4%)                                      16 (7%)                               67 (57%)


                Laborer                                             257 (33%)                                    95 (40%)           46 (39%)

                Agricultural worker                         268 (34%)                                    40 (17%)           20 (17%)

                Sales and service worker                 64 (8%)                                      16 (7%)                             15 (13%)

                Commercial sex worker                     16 (2%)                                        2 (1%)                               2 (2%)

                Other                                                 118 (15%)                                   58 (24%)             20 (17%)

                Unknown                                            56 (7%)                                      27 (11%)            13 (11%)

Note:  Northern Thailand includes Chiangmai, Chiangrai, Lampang, and Payao provinces.

ARC:   AIDS-related complex

Source : Ministry of Public Health data and authors' survey


The measurment of the economic impact of HIV/AIDS mortality on households in this study was based on the following three methods of analysis: the calculation of direct and indirect costs of death, the investigation of household coping strategies and the determination of the real economic impact of death from HIV/AIDS

Direct and Indirect Costs of Death

We calculated the direct and indirect costs of an HIV/AIDS-related death on a household using standard cost-benefit analysis. The direct costs of death included out-of-pocket medical care expenditure,.travel expenses relating to medical care, and the costs of funeral rites. The indirect costs of death were calculated from the foregone earnings of the deceased.

To calculate foregone earnings, we started by working out the total number of lost work years by           subtracting the age of the deceased from the average age of retirement, which we assumed to be sixty. For annual income foregone for those with a regular income we used a 5 percent discount rate. We then multiplied the annual earnings foregone by the number of lost work years to obtain total foregone earnings.

For those who had also held a supplementary job before their illness and death, we included the supplementary income in the calculations. Finally, in addition to the lost income of the deceased, we calculated the lost earnings of other household members who had to leave work to take care of the sick person to come up with the household’s total foregone earnings.

Household Coping Strategies

We analyzed household coping strategies based on a simple model of household economic decisionmaking. In this model families are concerned about their welfare along many different dimensions, for example, consumption, health status, education, and number of children, as well as the welfare of their extended family and unrelated community members.

Families have resources with which they can pursue their welfare. These resources include human capital (the number of family members, their education, and their earning capacity) and physical capital (savings, durable goods, productive assets, and land). They can use both human and physical capital to generate income for making purchases subject to environmental constraints, which include the prices and quality of available goods and services such as food, housing, medical care, and schooling. Decisions about how to pursue welfare result in welfare outcomes, for example, consumption, health status, and schooling of children.

When individuals suffer from an AIDS-related illness and ultimately die, their families are affected by an immediate reduction in their resources and welfare. The infected individual’s earning ability is reduced, and eventually the household loses all of that individual’s earning capacity. However, families do not react passively. Rather, they act to minimize the impact on their overall welfare. When individuals first become ill, they work less and may seek medical care. The lost income from the reduced time spent working and the increased medical expenses mean that fewer resources are available for the rest of the family to meet their needs. As a result, other family members may reorganize their time to minimize the income loss and smooth out consumption. A particularly costly reallocation of time is pulling children permanently out of

school, which lowers their future earning capacity. Some households may sell assets to pay for medical care and smooth consumption, which might compromise their future earning capacity. When the sick individual dies, families permanently reorganize their labor supply, time allocation, and expenditure patterns. While families that experience an AIDS-related illness and deaths are greatly affected, many other households are affected indirectly. For example, extended families who help each other out in times of need may transfer resources to those directly affected, orphaned children may be fostered with relatives, and elderly paren