Measuring the household level economic impacts of AIDS-related deaths is of particular
salience in South Africa, a country struggling with a legacy of poverty and economic
inequality in the midst of an HIV epidemic. Household panel data that span more than a
decade permit us to resolve many of the statistical problems that make it difficult to
determine these impacts. After allowing for the impact of demographic adjustments and
other coping strategies, we found evidence that these impacts are quite different across
different types of households, and that the largest and most persistent effects were in the
middle ranges of the South African income distribution, that is, households just above
the poverty line. Households below that level seem less severely affected, whereas
those above it seem to recover more quickly. All these results need to be treated with
caution because their statistical precision is weak.