The cost of bed bug anxiety: Travelers’ willingness to pay to avoid them

The explicit costs of bed bugs are well known such as extermination fees, lost furniture, and lawsuits. Yet the mental and emotional anxiety associated with bed bugs remains unclear. Economic analysis can identify what the value of avoiding bed bugs is to consumers and help businesses account for this potential cost. We study the value that travelers place on avoiding bed bugs within hotels.  We use a valuation technique known as a choice-based conjoint experiment to calculate the Willingness to Pay for a bed bug-free environment. Choice experiments are founded in the economic framework of Random Utility Models, specifically a conditional logit analysis to model respondent choice. A survey containing the choice experiment as well as relevant travel and demographic questions was implemented as an in-person intercept survey of travelers at an airport of a large Kentucky city.

The results of the choice-based conjoint analysis on hotel room characteristics largely met expectations. The Willingness to Pay for a bed bug-free environment was $114.13. Wi-Fi was also statistically significant and produced a Willingness to Pay of $43.95. Regarding relative Willingness to Pay estimates, consumers preferred a bed bug-free environment versus Wi-Fi. The significance is that the potential costs and anxiety of bed bugs are more valuable than the amenity of having Wi-Fi while staying at hotels.