How Beliefs about HIV Status Affect Risky Behaviors: Evidence from Malawi, Fifth Version

This paper examines how beliefs about own HIV status affect decisions to engage in risky sexual behavior using data on married males living in Malawi. Risky behavior is measured as the propensity to engage in extramarital affairs. The empirical analysis is based on panel surveys for years 2006 and 2008 from the Malawi Diffusion and Ideational Change Project (MDICP). Beliefs vary significantly over time in the data, in part because of HIV testing and informational campaigns. We estimate the effect of beliefs about own HIV status on risky behavior using a panel data estimator developed by Arellano and Carrasco (2003), which accommodates unobserved heterogeneity as well as belief endogeneity arising from the dependence of current beliefs on lagged behaviors. We find that beliefs are an important determinant of risky behavior, with downward revisions in the belief of being HIV positive increasing risky behavior and upward revisions decreasing it. We modify Arellano and Carrasco’s (2003) estimator to allow for underreporting of affairs and find the estimates to be relatively robust to underreporting. Using our estimates and a prototypical epidemiological model of disease transmission, we show that making individuals better informed about their HIV status, either by increasing the credibility of test results and/or increasing access to testing, would on net reduce the HIV transmission rate.