Internet's Dirty Secret: Assessing the Impact of Online Intermediaries on the Outbreak of Sexually Transmitted Diseases

We investigate how the expansion of Craigslist into different states over a 11 year period in the United States affected the incidence of HIV. Using a natural experiment setup, we identify the effects of Craigslist's entry on HIV trends by exploiting the variations across states and time. After controlling for extraneous factors, our results show that Craigslist's entry leads to a 19.8 percent increase in HIV cases, which maps out to an average of 158.7 cases for a state in a year. The analyses further suggest that non-market related casual sex serves as the underlying mechanism driving the increase in HIV cases, while paid transactions (e.g., escort services and prostitution) solicited on the site do not influence HIV trends. The increases in HIV cases as a result of Craigslist entry are estimated to impose treatment costs of over $118 million annually on the U.S. healthcare system. Study implications and limitations are discussed.