Survival Bias and the Impact of HIV on Wealth in Sub-Saharan Africa

Abstract: In this paper we estimate the effect of HIV-infection on household wealth. We use circumcision status as an instrumental variable, combined with DHS data, to obtain an exogenous variation in HIV on the individual level. We subsequently account for several biases in the data, including the early deaths of HIV-positive persons and the subsequently skewed dataset in favor of survivors. Specifically, we develop a rolling window, based on a three-stage environmental variables model to account for age- and wealth heterogeneity. This model then estimates the effect of HIV on wealth. Overall, the effects are large for poorer percentiles of the population and smaller for wealthier percentiles across a range of different subsamples.