Willingness to pay for intervention policies related to HIV/AIDS: a theoretical framework with endogenous risk, perceived effectiveness and altruism

Intervention policies for HIV/AIDS differ in their approaches, and acceptability to control the spread of the epidemics. We introduce a theoretical model to depict how several factors may determine an individual's maximum willingness to pay for any HIV/AIDS policy. Heterogeneous baseline risks, through risky sexual activities, operate so that those individuals with higher exposure to risky activities are inclined to pay for any policy that reduces the risk. However, given the epidemiological and economic context of a geographic region, the perceived effectiveness of a policy implies that it will reach some level of risk reduction outcome and then, not contribute any further to the control of epidemics. What comes into play is whether individuals observe the risk change generated by the policy and implications for behavioral changes. Finally, we also introduce altruistic motives as a determinant of the WTP.