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by: Gwen Rosenbaum

PrinciplesofEconomics ECON101

Marketplace > Oberlin College > Economcs > ECON101 > PrinciplesofEconomics
Gwen Rosenbaum

GPA 3.87


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This 2 page Class Notes was uploaded by Gwen Rosenbaum on Monday October 19, 2015. The Class Notes belongs to ECON101 at Oberlin College taught by Staff in Fall. Since its upload, it has received 72 views. For similar materials see /class/224396/econ101-oberlin-college in Economcs at Oberlin College.


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Date Created: 10/19/15
Modified from The Margin SeptemberOctober 1989 Page 1 of 2 By Dwight Lee Will More Condoms Mean Less AIDS It39s A Question of Elasticitv Like every other activity engaging in sex involves costs one of the most significant of those costs is the risk of contracting a serious even fatal disease such as AIDS To an economist this suggests that the amount of sexual activity demanded will be in uenced by the risk of that activity Based on that assumption we can show that making sex safer say by increasing the availability of condoms will increase sexual activity and depending on the elasticity could increase the incidence of sexuall transmitted diseases such as AIDS That is the probability of getting a sexuallytransmitted disease is not reduced to zero when using a condom Q Before going on can you see why making something safer might actually increase the amount ofAIDS THE DEMAND FOR SEX There is a demand curve for sex which like any other demand curve is downward sloping People will demand more the lower the price per unit In the case of the demand curve for sex it is useful to measure the price in terms of risk rather than dollars Such a demand curve shows that if the risk per sexual encounter is reduced the number of sexual encounters will increase Price risk per encounter Demand for sex Sexual encounters While it is difficult to know with precision the shape of the demand curve for sex such knowledge would be useful when considering the controversy over proposals to make condoms easily perhaps freel available in our high schools and colleges Those who favor making condoms more readily available argue that this availability would make sex safer by encouraging condom use Those who oppose a policy of readily available condoms argue that such a policy would cause an increase in sexual prom iscuity by making it less costly Q How would you decide between these two arguments Do you think people use economics or value judgements when deciding which quotside to favor Both sides make good points Greater availability of condoms would certainly increase their use which would reduce the health risk per sexual encounter But it is equally certain that reducing the health risk per sexual encounter will increase the number of such encounters The important question is By how much The answer to the quothow much question depends on the risk elasticity of the demand for sex which if we could measure it would tell us the percentage increase in the number of sexual encounters that will result from a 1 percent reduction in the average risk per encounter Note This is exactly the same as the price elasticity of demand that we have talked about in class Risk elasticity of demand change in number of sexual encounters change in risk per encounter If the value of the risk elasticity of demand for sex is less than one then increasing the availability of condoms will decrease the number of cases of AIDS or other sexuallytransmitted diseases For each 1 percent reduction in the risk of contracting such a disease from each instance of sexual intercourse there will be less than a 1 percent increase in the instances of intercourse But if the risk elasticity of demand for sex is greater than one then a policy that lowers the average per unit risk of sexual intercourse would increase the number of cases of AIDS and other sexuallytransmitted diseases The reduced risk per episode from engaging in sexual intercourse will be more than offset by an increase in the amount of intercourse in which students engage Modified from The Margin SeptemberOctober 1989 Page 2 of 2 By Dwight Lee Q If the last paragraph was true would you ever argue that we should make sexual intercourse more risky by outlawing the use of condoms Consider a hypothetical case Assume that the probability of contracting a sexuallytransmitted disease during each episode of sexual intercourse is ll000 if condoms are not readily available on campus and that the rate of sexual intercourse on a campus is 500 per week This implies that there will be on average one new case of sexuallytransmitted disease every two weeks 500 ll000 05 per week Assume next that a policy that makes condoms readily available will reduce the per intercourse probability of disease to 098l000 or a 2 percent reduction availability is not the same as use Suppose that reduction in the riskiness of sex increases the number of instances of intercourse on campus to 515 per week a 3 percent increase This implies that the risk elasticity of demand for sex is greater than one and slightly more than one new case of disease will occur on campus every two weeks 5l5098l000 05047 Making condoms more readily available has in this example caused an increase in the transmission of sexuallytransm itted disease Q The numbers used here are completely arbitrary what would happen if the availability of condoms reduced the risk per intercourse to 0951 000 that is if there was a 5 percent reduction in risk instead So what is the risk elasticity of demand for sex That39s an empirical question one that could only be answered by estimating the demand curve for sex with respect to risk That would be a difficult task While we can speculate about the risk elasticity it39s unlikely that anyone will produce a convincing measure of it any time soon Indeed if someone were to determine just what the elasticity is that would not by itself resolve the condom controversy Note this would be an example of where positive economics exist but people still disagree because of normative economics considerations Assume for example that it were established that the elasticity of demand is in fact greater than one That means that increasing condom availability will increase the incidence of AIDS and other diseases One could still favor such a policy on grounds it would increase total consumer satisfaction When the price elasticity of demand for any good is greater than one a price decrease will increase total spending on the good But total satisfaction is still increased That is no less true if payment is made in terms of risk than if it is made in terms ofmoney Alternatively suppose it were established that the elasticity is less than one so that the increased availability of condoms would reduce the incidence of sexuallytransmitted diseases Many would argue that there are costs other than disease associated with increases sexual activity on campus So expect the controversy continue The fact remains that an important issue in this controversy concerns demand elasticity Economic theory can39t tell us what that elasticity is But as is often the case in questions of public policy issues it can raise an issue that might be otherwise overlooked the possibility that making sex safer could increase the incidence of diseases such as AIDS Q Can you think of other similar cases What about the controversy of giving drugusers free needles You might want to think through this case Giving out free needles reduces the risk of disease per instance of drug use


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