Valuation when baselines are changing: Tick-borne disease risk and recreational choice

Understanding how changes in baseline risk influence preferences for risk reduction is important when valuing the welfare effects of environmental change, including the spread of disease. We conduct a survey-based choice experiment among respondents residing in areas with different prevalence of ticks and incidence of Lyme borreliosis (LB) and tick-borne encephalitis (TBE) in Sweden. Respondents face a trade-off between risk and travel cost when choosing between visiting recreational areas differing in prevalence of ticks and disease incidence. Our study indicates that the presence of ticks and the associated risk of tick-borne diseases significantly influence the choice of recreational area and have substantial welfare effects. The mean willingness to pay (WTP) per trip to avoid areas with different levels of ticks, LB risk and TBE risk ranges from 12 to 78 EUR. The WTP for risk reduction is significantly lower among respondents residing in risk areas compared to respondents in emerging risk areas. Explanations for these differences in WTP for risk reduction between groups with different baseline risks include differences in reference point utility, knowledge and learning, leading to adaptation of behaviour and preferences.