Past Exposure, Risk Perception, and Risk-Taking During a Local Covid-19 Shock

While the constant exposure to coronavirus disease 2019 (COVID-19) has increased people’s risk perception toward COVID-19, it has produced an opposite effect on risk-taking behavior. In the context of travel choices, this study examines the contradictory relationship between individuals’ risk perception and risk-taking behavior under a local COVID-19 shock. We compare airfare data from two airports in relation to the risk perception across Chinese provinces divided into high- and low-COVID-19confirmed regions based on the number of COVID-19 cases until November 9, 2021. We use the online search index on Shanghai COVID-19 to measure the risk perception across these provinces. The results show that fliers from high-COVID-19-confirmed regions were unwilling to pay more for a safer journey than those from low-COVID-19-confirmed regions. However, the search index shows a higher COVID19 perception among the former group of fliers. The opposite direction of change between risk perception and risk-taking suggests the role of risk preference in experience-based decisions in a rare disaster scenario. The H1N1 virus exerts a significantly positive experience effect on risky travel choices, unlike severe acute respiratory syndrome (SARS). It implies that similar transmissibility, and not the same virus family, constitutes the domain specificity of experience effects in COVID-19. This study suggests the need to extend the experience effects to consider the preference-based channel. It also has implications for understanding the economic behaviors of individuals in disaster scenarios based on their domain-specific disaster experiences.