Altruist talk may (also) be cheap: Revealed versus stated altruism as a predictor in stated preference studies

The research literature has analysed the effect of altruism on WTP and hypothetical bias, focusing on the validity and reliability of the WTP measure, while the reliability of the applied self- reported altruism measures has not been studied in detail to our knowledge. [...] We take the categorical nature of our indicators into account and estimate the parameters using the diagonally least squared model and let the chi- squared test statistic be mean- and variance-adjusted (Santorra and Bentler 1994).18 The parameters of 18 Due to few answers in one of the four categories across the indicators, we collapse the smallest categories and reduce to three categories. [...] We use the log of the midpoints of the payment card cost amounts as the WTP variable, and we allow error terms between the latent variables to be correlated. [...] If the loading factor is less than 0.5, the variance due to measurement error is larger than the variance captured by the factor, which makes the validity of the indicators and the factor questionable (Fornell and Larcker 1981). [...] WTP is the natural logarithm of the midpoint of the respondents’ chosen payment value on the payment card and the next higher value.