Researchers of climate change have suggested that climate change and variability has a significant influence on the epidemiology of infectious diseases, particularly vector-borne diseases. The purpose of this study is to explore how climate conditions and the dengue fever epidemic in Taiwan are related and to estimate the economic impact of climate change on infectious diseases. To achieve these objectives, two different methods, one involving the Panel data model and the other the Contingent Valuation Method (CVM), are applied in this study. At first, we use the Panel data model to assess the relationship between climate conditions and the number of people infected by dengue fever during the period from January 2000 to February 2006 in 308 cities and townships in the Taiwan. The results of the empirical estimation indicate that climate conditions have an increasingly significant impact on the probability of people being infected by dengue fever. The probability of being infected by dengue fever due to climate change is then calculated and is found to range from 12% to 43% to 87% which represent low, mid, and high probabilities of infection caused by climate change when the temperature is increased by 1.8A degrees C. The respondent's willingness to pay (WTP) is also investigated in the survey using the single-bounded dichotomous choice (SBDC) approach, and the results show that people would pay NT$724, NT$3,223 and NT$5,114 per year in order to avoid the increased probabilities of 12%, 43%, and 87%, respectively, of their being infected with dengue fever.
