Oxfam calls on world leaders to lift Palestinian aid freeze at Stockholm conference

International agency Oxfam is calling on donor governments, meeting in Stockholm Friday, to resume international aid to the Palestinian Authority in order to address the deteriorating humanitarian situation in the occupied Palestinian Territories.

Oxfam believes that the Palestinian Authority stands to lose more than $1 billion following the suspension of aid earlier this year and Israel withholding Palestinian tax revenue, according to UN and World Bank estimates.

Oxfam says that Palestinians are being pushed into deep poverty as a result.

Hundreds of thousands of people have been left without an income. Rubbish is piling in the streets, sewage is overflowing from household cesspits, schools are running without budgets and government employees are striking for lack of pay.

A temporary scheme agreed by donors in June to pay aid directly to the Palestinian people has failed to solve the problem, Oxfam said.

Oxfam International spokesperson Adam Leach said:

“If donor governments are serious about tackling poverty and suffering facing Palestinians, they should immediately resume funding to the local and national authorities charged with delivering essential services. They must also press Israel to transfer Palestinian tax revenues that are being held on behalf of the Palestinian government.

“The temporary mechanism, established to provide direct support to Palestinians, excludes tens of thousands of government employees. Plans to provide payments to the poorest 40,000 Palestinians and their families, who used to receive social welfare payments, have so far failed to materialize.”

Fawsi Sadqi Nasser, an English teacher in the Madama school near Nablus, spoke to Oxfam about the impact of the changes:
“ I am a teacher. The teachers are always waiting for our salaries but now I have not received my salary for months. Life has become extremely difficult. The children in the family feel the situation. At my school, around half of the children’s parents work for the Palestinian Authority. When you look at the children you can notice a change in their faces.”

The donor conference will discuss continuing problems of humanitarian access and movement that remains a significant contributor to poverty. Crossing points into Gaza have been repeatedly closed causing severe shortages of essential supplies, including milk powder and bread and stifling economic activity and trade by blocking the free flow of goods and people. No humanitarian aid has been able to pass into Gaza since 15 August. It has also interrupted the ongoing work of Oxfam partners seeking to rehabilitate water systems.

Notes to Editors:

The UK, US, Canada, Norway and the European Commission suspended aid to the Palestinian Authority government following a meeting of the Middle East Quartet (UN, Russia, EU and US) on March 30th 2006.
The United Nations estimates that the Palestinian Authority has lost around $500 million from Israel’s withholding of Palestinian tax revenues. In 2005, the World Bank reports that international aid to the Palestinian Territories was $1.3 billion. The Bank believes that direct budget support to the Palestinian Authority accounted for $350 million. A further $450 million is provided as technical assistance and $500 million in humanitarian assistance, some of which is also channeled through the Palestinian government.
Some international donors continued direct support to the Palestinian Authority, including the Swedish and Russian government.
The Temporary International Mechanism was agreed in June by donors to provide limited direct assistance to Palestinians. The mechanism has provided one partial payments for over 11, 000 health workers and 50, 000 of other government employees on low incomes, supporting pensioners, helping to pay hospital costs, and providing fuel for water pumps in Gaza. The $100 million provided by the European Commission together with some additional support from other donors has not replaced the hundreds of millions in lost government revenue.

At the international conference, Oxfam is calling on international donors to:
• Lift the current suspension of aid to the Palestinian Authority
• Ensure unimpeded and unhindered humanitarian access
• Ensure the repair of damaged civilian infrastructure
• Reconsider the Temporary International Mechanism
• Ensure Israel transfers Palestinian tax revenues
• Ensure implementation of the Agreement on Movement and Access.
For more information contact: Ian Bray 01865

Oxfam Water Supply Scheme for Emergencies

Oxfam Water Supply Scheme for Emergencies
The equipment is part of several packages devised by the Oxfam Public Health Engineering Team to help provide a reliable water supply for populations affected by conflict or natural disaster. The equipment is designed to be used with any or all of the following Oxfam water equipment: Water Storage equipment, Water Coagulation and Disinfection equipment, Water Pumping equipment, Water Distribution equipment, Well Digging equipment, and Water Testing Kit. All are designed using available, easily transported equipment which is simple, rapidly assembled, and fully self-contained, to provide an adequate, safe water supply at moderate cost. The principles used in these packages may often be useful in long-term development projects. The Oxfam equipment packages, which consist of “Oxfam” tanks (steel sheets, rubber liners), diesel water pumps, 3” PVC pipes etc, have been used successfully in the last two decades in often harsh environments, ranging from tropical to temperate climatic areas. Although this equipment is designed for emergencies, if installed and protected adequately it can give many years of useful service, though some up-grading works will be necessary to prolong its life. This equipment can be dismantled and reused elsewhere. However, these Oxfam equipment packages, while being simple to erect over a period of days, yet durable enough to last several years, do not lend themselves to very rapid deployment in a few hours. Increasingly, the nature of work which Oxfam has been called on to undertake has required equipment that can be rapidly deployed then dismantled and moved to other locations. This has led to the development of the so called “rapid response kits” since the mid-1990s. This type of equipment is seen as a necessary complement to the original Oxfam equipment and is best used to provide a start up package in the absence of a detailed assessment and where affected populations are likely to be highly mobile. The relatively higher equipment costs and lack of suitability for anything other than short term water supply, means that the deployment of the “rapid response kits” should be used only where appropriate.

Wherever possible, water supplies in emergency conditions should be obtained from underground sources by exploitation of springs, tubewells, or dug wells. No filtration will then be needed. However, if sources are not available or cannot be developed, the use of surface water from streams, rivers, lakes or ponds becomes necessary.
Usually these surface sources are polluted. The level of faecal contamination can be measured by use of the Oxfam/Delagua Water Test Kit (see Section C). Where a serious level of faecal pollution exists, it is essential firstly to try to reduce the cause of contamination, and secondly to treat the water to make it suitable for human consumption. The Filtration equipment provides a simple, long-term physical and biological treatment system that requires no chemicals (except small amounts of chlorine required during filter cleaning) and needs only simple regular maintenance.
The filtration equipment will enable a considerable improvement to be made in the quality of a polluted water source. However, it is essential that a suitable intake be constructed at the source to minimise the concentration of suspended solids in the water before it enters the treatment system.

The well rings and pipes required for this are not included in these kits. The filtration equipment uses the simplest form of water treatment, usually requiring no chemicals and relying on gravity to provide the flow through the system. It consists of settlement, roughing filtration and slow sand filtration. Water storage tanks for filters are not included in the slow sand or roughing filter kits. These should be ordered separately and allowance made for treated water storage too. If necessary, additional treatment of the water may be provided by chlorination. The treatment process and its effectiveness can be monitored by use of the Water Test Kit. Care is needed in the operation of this equipment, and a basic understanding of the physical and biological processes is useful in order to get the most out of it.

Although some outline design data is provided to give guidance in designing and setting up a suitable filtration system, it is very important to undertake basic water quality assessments. If the source is a river or stream, the quality will certainly vary from season to season and therefore measurements over a longer period of time will be necessary to determine the treatment requirements. However, given the time required to build filtration treatment plants (perhaps 2-3 weeks because of collecting, cleaning and placing media), this equipment would generally be appropriate for use in the post-emergency phase (after 6-12 months). Measurements can be taken during this perod. For more detailed information on designing and operating a plant refer to “Surface Water Treatment by Roughing Filters” by Weglin.

SPHERE recommends a figure of 15 litres per person per day for water supply. This figure is based upon water requirements for drinking and food preparation, which require higher quality water, as well as water needed for clothes washing and bathing. Where nearby sources of water such as streams and rivers are available and the safe use of these for washing clothes and bathing can be managed, it may be appropriate and necessary to initially size the treatment system on a figure of 10 litres/person/day (as this manual assumes). This would provide the water required for food preparation and drinking (i.e. a minimum of 5 litres/person/day) while allowing for subsequent increased demand, perhaps due to population expansion. Given the time and effort required to set up such water treatment systems, it is appropriate to ensure there is ample capacity in the system.

Oxfam uses two basic types of filtration process for treatment of physically and microbiologically contaminated (surface) water:

1. Water (surface) with high physical contamination (which often has high microbiological contamination too), needs to be treated using roughing filters prior to being treated by slow sand filters. The primary function of roughing filters is to reduce physical contamination – although they do also have a limited ability to reduce microbiological contamination.
2. Water (surface) with low physical contamination (suspended solids) but with high microbiological contamination can be treated using slow sand filters alone. The primary function of slow sand filters is to eliminate microbiological contamination
– they have limited ability to cope with high levels of physical contamination.
Note: physical contamination is caused by suspended solids, approximate estimates of which are made by measuring turbidity.

Source: http://www.oxfam.org.uk/what_we_do/emergencies/how_we_work
/downloads/water_filtration_manual.pdf


Water Issues

The world will need 55 percent more food by 2030. This translates into an increasing demand for irrigation, which already claims nearly 70 percent of all freshwater consumed for human use. Recent estimates indicate that 1.1 billion people still do not have access to an adequate supply of drinking water and some 2.6 billion do not have access to basic sanitation. These people are among the world’s poorest. The second UN World Water Development Report points out that the hydrological cycle, upon which life depends, needs a healthy environment to function. Evidence indicates that the diversity of freshwater species and ecosystems is deteriorating rapidly, often faster than terrestrial and marine ecosystems. Ninety percent of natural disasters are water-related events, and they are on the increase. Many are the result of poor land use. A resistant varieties of crops for irrigated and dryland areas to increase water use efficiency and water productivity. Agricultural products are expected to increase from 60 million tons in 2001 to 90 million tons by 2004.


Challenges in the 21st century by 2020

Iran's population is estimated to reach 100 million. However total agricultural production is expected to be 200 million tons, of which 189 million tons will be harvested from irrigated crops. Total water supply for agriculture will be about 100 bcm. This means that by the year 2020, water productivity should reach 1.9 kg/m3.
To fulfill this expectation, agricultural commodities (wheat, barley, maize, oil crops) will be the main focus for improvements. With opportunities for expanding areas under cultivation almost exhausted, additional food production will have to be accomplished mainly through increasing productivity. Intensive use of water, fertilizers, and other agricultural inputs for crop production at present are the major cause of problems in soil and groundwater salinization, nutrient imbalances, incidence of new pests, and diseases, and environmental degradation.

Rising biotic pressure, lack of a suitable soil management system, and lack of inputs to realize optimum potential of land appear to threaten sustainability of agriculture. Thus, the consequences are degraded lands, loss of biodiversity, and soil.

Erosion, deforestation, and overall environmental pollution, all of which result in lowered productivity. For efficient and sustainable agriculture it will be essential to shift from commodity centered approach to a farming systems approach, which calls for multidisciplinary efforts.

This will require emphases on efficiency, sustainability, post harvest management, mechanization, marketing, and trade. Such an approach will also require forging links withal who are concerned at the regional, national, and international levels.

With implementation of these new approaches, water productivity should be increased to at least 1.9 kg/m3. this implies that the institutional structure and procedures of water allocation in the agriculture sector should be modified.

This would necessitate emphases on special prioritization, policies, modernization, water use efficiency, and productivity management. To elaborate more on the importance and role of water and to draw the necessary attention for improving water productivity in the future.

The possible increase in water resources is very limited 9.7 and 22 percent after 5 and 22 years, respectively. However, in order for agricultural products from the irrigated land to increase significantly (by 150 and 337 percent by 2005 and 2020, respectively), water productivity 0.7 kg/m3 has to be increased to 1 and 1.9 kg/m3 by 2005 and 2020, respectively.

Objectives and challenges
It is anticipated that agricultural products from irrigated areas will increase from 56 million tons in 2000 to 85million tons in 2005, this would be realized when our after resources can be increased up to a maximum of 10-22 %

Therefore, it is necessary to increase water productivity in agriculture from 0.7 kg/m3 in 2000 to 1.9 kg/m3 by2020. The expected increase in agricultural products basically depends on the country's available water resources. Water scarcity is the most limiting factor in agricultural productivity in Iran. Attention to improvements in water supply and water productivity programs has been the most important and governing policy during the past 22 years.

Under this policy, different rules have been applied and, in addition, different technical infrastructures (executive, research, and consultative) in both public and private sectors have been developed. This attention, in addition to establishment of special laws and regulations, has been considered in the construction of development programs. Among the established laws which can be nominated are the Balanced Distribution of Water law (established in 1983) and the executive instructions of optimization of the agricultural water consumption.


Public Services
The main concern in the concept of good governance is to meet the basic needs of human beings, such as nutrition, health preservation, decent housing, and education each of which has a corresponding human right. Human beings are the main concern for sustainable development that highlights the right to a healthy and productive life in harmony with nature. Poverty is recognized as a threat to sustainable development and the right to life. The role of local communities has been particularly highlighted in their right to promote sustainable development and to participate in environmental management and development.

Local governments are the closest public sector institution with respect to the community to prioritize and carry out public projects. The local arena, furthermore, has a particular advantage and capacity to identify and understand local problems, and consequently is the most appropriate level at which to foster democratic mechanisms which is approved by informed and accountable authorities. Participation guarantees a more efficient and more rational functioning of local public activities and use of resources. People’s engagement proposes a change in the dynamics between government and the governed. The community is hence transformed into a promoter of ideas and an active actor in the public realm. The government is hence transformed into ‘expert advisor’ and ‘technical implementer’ of publicly agreed upon works.
People’s participation in public projects is not a homogenous process, but has many different shapes and grades subject to local administration, and to society and government specific circumstances and fabrics. It is important that the promoter of participation understand thoroughly the advantages and disadvantages that these modalities may imply, since each of them will generate different expectations by the actors. Participation hence, implies not only negotiation, convergence, and cooperation of interests and actors, but also disagreement and confrontation. It does not entail a mere approval of proposals made by a regional administrator, but genuine involvement of all relevant stakeholders in the process. People’s involvement encourages the design and execution of public policies, better identifying the basic needs of the community and the use of public resources. Such information is essential to the implementation and review of environmentally sound and socially responsible sustainable development.
Participation transforms the nature and perceived value of the public good, contracting the indifference of society toward public matters and developing a sense of belonging and ownership in the community which promotes efficient use of resources and reduce overuse and waste. People’s engagement tends to increase public revenues proportional to the level of increase in perceived value and ownership of the public good, and the subsequent increase in willingness to pay taxes associated to public investments and consequently increases the legitimacy of the State.

Audit and R&D

A fundamental property of audit dynamics is known as Goodhart's law: What's counted counts. (The next most succinct is When a measure becomes a target, it ceases to be a good measure.)
Studies, considered the origins of the audit culture -- an emergent phenomenon of formidable power -- and the increasing recognition. Today, that while auditing is useful and necessary for some purposes it is not the Answer to Everything, and indeed that the drive to audit everything, and to constrain everything by rigid rules, measures, and targets, `can entirely shut down the drive for innovation' and auditing everything has infinite cost.
There seems to have emerged an audit culture in the deepest sense of the word, involving sets of largely unconscious assumptions that have somehow become embedded in the minds of many people. What are the most basic principles behind the drive to audit everything? Arguably, they are fairness, objectivity, and prudence. What could be more reasonable, or more worthy of our aspirations? What could be more essential to a modernized democratic society? These principles seem to be deeply embedded in the minds of many journalists, politicians, and members of the public.
Our Principle says among other things that `performance' must be measured numerically. How else, indeed, can one fairly and objectively determine anyone's salary? But People can be trusted provided that they audit themselves. Because advanced human societies need a highly skilled, intelligent, reliable, enterprising workforce, they will come to recognize, notwithstanding the hyper credulity instinct that auditing and measuring everything is both a mirage and a huge waste of resources. There's actually no alternative to reliance on trust -- and to rebuilding trust where necessary -- for instance trust in professional ideals and ethics. An advanced society will recognize this explicitly and live with the risks. It will use auditing resources in new and cost-effective ways by concentrating them not on trying to monitor and measure everything but, rather, on checks and balances against gross human failings. It will find new ways of valuing and encouraging professional ideals and ethics, instead of devaluing and discouraging them through Principles.
It will find new ways of promoting flexibility rather than rigidity. Perhaps we can hope for an increasing public acknowledgement of these points by more of our journalists and politicians, perhaps even some soundbites from the heights of government, daring to say that auditing and rigid rules are subject to Goodhart's law and not the Answer to Everything.
The audit culture, collectively speaking, thus fails to remember that human beings, along with other life forms, normally and naturally deal with numbers of unforeseen, and unforeseeable, possibilities. Many of these are, of course, ways for things to go wrong; and humans are quite good at coping with things going wrong, provided their hands aren't tied too tightly. By the same token, rigidity would be a recipe for vastly increasing the number of things that go wrong, especially in complex systems engineering like computer software and genetic engineering, and in medicine, in education, and in human societies themselves. The audit culture is, collectively, ignorant of all this. In promoting and enforcing single pathways and single `best practices' to cover all circumstances it unconsciously assumes that people are, or ought to be, simple machines, like clockwork, predictable and controllable in simple ways.
It is an old mistake, one of the worst mistakes of Enlightenment thinking and, incidentally, a prime reason for the misuse of science and the distrust of science. `Look what Newton did with planetary dynamics; let's do the same with social dynamics!' It's exactly the mistake that led first to behaviourist psychology and then to the horrifying experimentation on humans and human societies by 20th-century totalitarian states. We are reaching new levels of self-understanding, scientifically as well as intuitively. We are beginning to respect in full measure the complex reality not only of humans, not only of computer networks, but also of `simple' life forms as they used to be called sordid details.

Public services performance assessment
When the question of delivery is raised governments refer to workable budget allocated for running public services and education, health and other services. But, it has been clear that extra funding is not enough to improve performances. The Government has created several major new inspectorates and marking every public service subject to inspection. Therefore, the number of inspectors has soared and according to the Government's own figures the cost of inspection has more than doubled since 1999.
However, despite the claims and counterclaims that inspection does not deliver efficient services, the truth is that there are not any documents and knowledge about the impacts of inspection in the UK. Since there are different approaches to inspecting local council services in England, Scotland and Wales, undertaking comparative study can elaborate on difference of outcomes. In England, the Government has adopted a hard-edged approach based on targets and league tables which 'name and shame' the worst authorities. By comparison, Scotland and Wales have pursued a more consensual approach. They have less inspection of councils and ministers generally try to sort out problems of poor performance through partnership working and behind the scenes negotiations. Therefore difference of performance management has potential for future research studies.
However who and where you serve matters a lot, , in the NHS, local government, the water industry or even in sectors like banking,. ‘Performance’, as measured by perceptions, is to some degree beyond the control of individual organisations – it is quite strongly linked to the characteristics of the local population that they serve. Because of this there are real dangers in comparing performance, however it is measured without taking into account local context in which public services are operating.

Today’s public services have to meet customer expectations. But how well these expectations and priorities understood?
There are some key features:
• simplicity
• speed of access and service
• good communications
• good customer care
• core services delivered to a high standard.
Most people still feel that public services fall short of their expectations. In local government, for example, only one in three people are satisfied with the way their complaint was handled, exactly the same as a decade ago. Part of the challenge is that expectations are rising for many aspects of customer care and accessibility, not necessarily on service standards per se. Ipsos MORI’s analysis of customer satisfaction for the Cabinet Office highlights the role of comparisons in driving expectations – and it is access and customer service that the private sector uses to differentiate itself from its competitors.
And public services can be much better at identifying what really matters to the public, so that they are optimising what they do, and not investing resource in elements of their service that simply don’t make any difference to the public. If public expectations are growing and citizens are measuring what you deliver against these expectations, then this means that departments must focus on what the public regards as core – but not to the detriment of elements of a service that are essential in professional terms. It means being clear about what is essential technically, medically or professionally and what really matters to the people you serve.
Overall, the analysis throws new light on perceptions and the factors that are – and are not – under local public service managers’ control. There is always room for improvement, but it does highlight the need for any system of assessing overall performance to properly reflect local conditions, rather than assuming everyone faces exactly the same issues – without condoning weak performances. In meeting the challenges the public lays down for public services – we must remember that with increasing difference and diversity, one size will not fit all.

Source:
A fair measure of success? How performance assessment of public bodies may be falling short, Public Services Research Project: Correlates of Success in Performance Assessment, Oxford University, 2005
Page, B., Ipsos MORI Social Research Institute and Ipsos MORI Public Affairs.

Facilitating humanitarian learning activity

For the aid workers to learn, the “ Learning Activity” should bear equal importance to process and outcome which is focused on experiences and stories shared with the wider humanitarian community. Informal exchange of feedbacks between facilitators and participants are indicators of a successful Learning Activity. Facilitator’s aim is to provide a learning space where experience is shared with a sense of purpose. It will be up to the facilitator to guide the group in order for participants to be able to strike an adequate balance between focusing exclusively on a “Case Study” approach (e.g. facts, figures, concrete situations, predominantly rational, linear in narrative terms, with explicit learning points, etc.) and focusing exclusively on a “Telling Stories” (e.g. complete spontaneity, improvisation, emotional, entertaining, etc.) approach. Facilitator can introduce criteria for a good story to help participants to focus on the context of activities. The paradigm that “seriousness equals productivity” in a learning environment has been reconsidered. It can be replaced by participants feeling relaxed, comfortable, safe, and without any pressure to perform. Facilitator effort and creativity to instigate a productive yet “informal” setting bestows an air of collective enthusiasm for learning and discovering the significance of involvements in humanitarian works.

The key is to facilitate a process that will be ultimately owned by participants. The role involves to allow the process to unfold and gain a life of its own, keeping the safety of the learning environment and empowering of the participants as your principal task at all times. Facilitator awareness of personal and professional limitations is highlighted and of being transformed into a therapist, counsellor or support group leader. And facilitating storytelling sessions does not mean to be a performer of master storyteller. It is important to create a space where people can learn from each other in a “natural”, “relaxed” and “effortless” way. Creating informal learning environments should be carefully adapted to the cultural norms and the context in which the activity is taking place. Encouragement methods for keeping the environment informal can be used such as: telling an oversight, sit on the floor; witness and listen in comfortable positions; informal language; encouraging question raising; use spaces beyond the traditional training room; offer participants something to drink or eat (small quantities) while telling each other stories or sharing experiences; and facilitator’s not “too dominant” monitoring attitude while not to let go of the main purpose.

Source: Sphere Project

Measuring Risk Taking

How do you see yourself: “Are you generally a person who is fully prepared to take risks or do you try to avoid taking risks? Please tick a box on the scale, where the value 0 means: ‘unwilling to take risks’ and the value means: ‘fully prepared to take risk’.”

“What share of your lottery winnings would you be prepared to invest in this financially risky, yet lucrative investment?”

Evidence of heterogeneity found in survey across individuals shows that willingness to take risks is negatively related to age and being female, and positively related to height and parental education.(1) using standard lottery question to measure risk preference, found similar results regarding heterogeneity and determinants of risk preferences. The lottery question makes it possible to estimate the coefficient of relative risk aversion for each individual in the sample. Using five questions about willingness to take risks in specific domains — car driving, financial matters, sports and leisure, career, and health — the paper also studies the impact of context on risk attitudes, finding a strong but imperfect correlation across contexts. Using data on a collection of risky behaviors from different contexts, including traffic offenses, portfolio choice, smoking, occupational choice, participation in sports, and migration, the predictive power of all of the risk measures was compared.

The first question asks for attitude towards risk in general, allowing respondents to indicate their willingness to take risks on an eleven point scale, with zero indicating complete unwillingness to take risks, and ten indicating complete willingness to take risks.

The next five questions all use the same scale, and similar wording, but refer to risk attitudes in specific contexts: car driving, financial matters, leisure and sports, career, and health. All of these measures are characterized by ambiguity, in the sense that they leave it up to the respondent to imagine the typical probabilities, and stakes, involved in taking risks in a given domain.The last risk question is different, in that it corresponds more closely to the lottery measures used in previous studies. The question presents respondents with the following choice: Imagine you had won 100,000 Pounds in a lottery. Almost immediately after you collect, you receive the following financial offer from a reputable bank, the conditions of which are as follows: There is the chance to double the money within two years. It is equally possible that you could lose half of the amount invested.

Respondents are then asked what fraction of the 100,000 Pounds they would choose to invest, and are allowed six possible responses: 0, 20,000, 40,000, 60,000 80,000, or 100,000 Pounds.5 This measure shares the common feature of other lottery measures in that it presents respondents with explicit stakes and probabilities, and thus holds risk perceptions constant across individuals. Because beliefs are held constant, differences in responses are more clearly attributable to risk preference alone, as compared to the six measures above, which potentially incorporate both risk preference and risk perceptions.

“Willingness to invest in a hypothetical lottery with explicit stakes and probabilities”

We investigate the relationship between willingness to take risks and selected personal characteristics: gender, age, height, and parental background. We focus on these characteristics because they are plausibly exogenous and therefore allow causal interpretation. The analysis reveals several facts: (1) women are less willing to take risks than men, at all ages; (2) increasing age is associated with decreasing willingness to take risks; (3) taller individuals are more willing to take risks; (4) individuals with highly-educated parents are more willing to take risks. These effects are large and very robust, with the exception of parental education, which becomes insignificant in some specifications. This evidence on determinants has important implications. For example, differences in risk preferences could be one factor contributing to the well-known gender wage gap, gender-specific behavior in competitive environments, and gender differences in career choice. The impact of age implies increased financial conservatism in ageing societies, and the height result points to a possible mechanism behind the higher earnings potential of taller individuals. These four findings also suggest characteristics that can be used to partially control for risk attitudes in the absence of direct survey measures field experiments with a representative subject pool can be used to validate survey measures, in order to end up with both statistical power and confidence in the reliability of the measures. To test the validity of our survey measures, we conducted a field experiment in which participants had the opportunity to make risky choices with real money at stake; it was found that answers to the general risk question are good predictors of actual risk-taking behavior in the experiment.

A fundamental question surrounding the notion of risk attitudes is the relevance of context. In economics it is standard to assume that a single, underlying risk preference governs risk taking in all domains of life. In line with this assumption, economists typically use a lottery measure of risk preference, framed as a financial decision, as an indicator of risk attitudes in all other contexts, e.g., health. Some psychologists and economists, however, have questioned whether stable utility functions and risk preferences exist at all, given that risk attitudes appear to be highly malleable with respect to context in laboratory experiments. An alternative interpretation of this evidence, of course, is that a stable risk preference does exist, but that individuals believe the typical risk in one context is greater than in another, and indicate different willingness to take risks accordingly. Average willingness to take risks turns out to differ across contexts. However, the correlation across contexts is quite strong. Principal components analysis tells a similar story: one principal component explains the bulk of the variation, suggesting the presence of a single underlying trait, but each of the other components still explains a non-trivial amount of the variation.

There has been evidence of differences in risk perception. In fact, risk perceptions are known to vary across individuals based on evidence from psychology.1 A number of studies have asked directly about risk perceptions and have documented a tendency for women to perceive dangerous events, such as nuclear war, industrial hazards, environmental degradation, and health problems due to alcohol abuse, as more likely to occur, in conditions where objective probabilities are difficult to determine.

Willingness to take risks in health matters is a better predictor of smoking than the hypothetical investment question, or the general risk question, or any other domain-specific question. Clearly, women are more likely to choose low values on the scale and men are more likely to choose high values. Clearly, the proportion of individuals who are relatively unwilling to take risks, i.e., choose low values on the scale, increases strongly with age. For men, age appears to cause a steady increase in the likelihood that an individual is unwilling to take risks. For women, there is some indication that unwillingness to take risks increases more rapidly from the late teens to age thirty, and then remains flat, until it begins to increase again from the mid-fifties onwards. It is important to note that this relationship could reflect a direct effect of age on risk preferences, but could also be driven by cohort effects, i.e., society wide changes in risk preferences over time, perhaps due to major historical events.

The difference in age patterns for men and women makes it less credible that the change in risk attitudes is attributable to cohort effects, because major historical events are likely to affect both men and women at the same time, but it is difficult to definitively disentangle the two explanations with the data available. The most important economic variables that need to be controlled for are measures for income and wealth. High income or wealth levels may increase the willingness to take risks because they cushion the impact of bad outcomes.

A variety of other personal and household characteristics were studied in relation to risk taking behaviours. These characteristics, which are all potentially endogenous, include among others: marital status, nationality, employment status (white collar, blue collar, private or public sector, selfemployed, non-participating), education, subjective health status, and religion.

Additional individual characteristics such as wealth, debt, household income, marital status, number of dependent children, country of residence before unification, foreigner status, schooling degree, employment status, occupational choice, employment rank, public and private sector employment, life satisfaction, general health status, smoking, and weight.
In economics it is standard to assume the existence of a single risk preference governing risk taking in all contexts. In line with this assumption, economists typically use a lottery measure of risk preference, framed as a financial decision, as an indicator of risk attitudes in all other contexts. By contrast, there is considerable controversy on this point in psychology. Based on laboratory experiments in which self-reported risk taking is only weakly correlated across different contexts, some studies conclude that a stable risk trait does not exist at all.

But little or no correlation would provide evidence against the standard assumption; a strong correlation would suggest the existence of a stable risk preference. Exploring the determinants of willingness to take risks in specific contexts, evidence indicates that the same factors determine risk attitudes across contexts would also lend support to the notion of a stable risk preference.

Another way of assessing the stability of risk attitudes is to check what fraction of individuals is relatively willing to take risks for all of the different measures. It turns out that 51 percent of individuals are willing to take risks in all domains under question (6 domains) and more than 1 third are willing in at least five domains. The relatively large correlation across contexts, and the stability of an individual’s disposition towards risk across domains strongly suggest the presence of a stable, underlying risk preference. The consistency across domains is not perfect, and could indicate some malleability of risk preferences, but it seems more likely that this variation reflects the risk perception component of the measures, e.g. a tendency for most people to view car driving as more risky than sports and thus state a relatively lower willingness to take risks in car driving.

Given that the questions ask about ”willingness to take risks,” it is possible that individuals could think of the same gamble, in utility terms, across contexts, in which case any variation at all in willingness to take risks would be inconsistent with stable risk preferences. It seems more likely, however, that individuals imagine the typical risk they expect to encounter in each context, based on their subjective beliefs, and state their willingness to take this risk. In this case, the pattern we observe would reflect a stable risk preference but varying risk perceptions.

Overall, having a high educated parent increases willingness to take risks. A more highly-educated mother is associated with a higher willingness to take risks in all domains, except for car driving and health. In summary, findings suggest the existence of a stable, underlying risk preference. One source of evidence is the strong correlation of risk attitudes across contexts, and the finding that a single principal component explains the bulk the variation in risk attitudes. Another piece of evidence is the fact that risk attitudes have similar determinants in all contexts, in the form of the four exogenous factors. There is some variation in risk attitudes with respect to context, but this seems likely to reflect variation in risk perceptions across contexts. Differences in risk perception could also potentially explain why the exogenous factors have effects of varying magnitudes across contexts, but a more detailed investigation of why, e.g., the gender effect is stronger in some contexts than others could be an interesting subject for future research.

The question is raised whether the survey instruments reliably predict risky behavior, despite the fact that they are not incentive compatible and are therefore potentially behaviorally irrelevant? The answer to this question is of great importance both from a methodological and a practical point of view. Second, how do the different risk measures compare in terms of predictive power? In particular, how do the alternative measures fare, compared to the more standard measure of risk preference, and how do context-specific measures perform within and outside of their corresponding context? For example, is smoking best predicted by a health related risk question or is it equally well explained by a general risk or hypothetical lottery question? In the past, economists have typically used only a single question, most often a hypothetical lottery question to predict risk taking behavior in all contexts. To address our questions, we use a collection of behaviors which includes portfolio choices, participation in sports, occupational choice, smoking, migration, life satisfaction and traffic offenses.

In summary the survey found that each one of our seven risk measures predicts several behaviors. We can therefore reject the hypothesis that the measures are behaviorally irrelevant. This is especially true for the general risk question, which is the only measure to predict all of the behaviors. The fact that this measure is capable of predicting risky behaviors across very different domains of life suggests once more the existence of an underlying risk trait that is not specific to a particular domain. Interestingly, the general risk question seems to capture this trait much better than the hypothetical risk question. This latter measure not only fails to predict important behaviors but in some cases appears to make the wrong prediction. In this sense, conclusions made are qualified that a significant correlation between a set of behaviors similar to the ones we study and a risk measure similar to our hypothetical investment question. Even though we think our results support the assumption of a stable underlying risk preference, our analysis also shows that individual risk perceptions vary significantly across domains. In order to predict domain-specific risk taking behavior, it is therefore indispensable to use domain-specific risk questions. Using, e.g., simple lottery questions can only be considered an inadequate substitute for measures using situation-appropriate context.

To summarize the results of survey, the first finding is that the distribution of willingness to take risks exhibits substantial heterogeneity across individuals. Second, these individual differences are partially explained by differences in four exogenous factors: willingness to take risks is negatively related to age and being female and positively related to and height and parental education. A third important finding follows from the main methodological contribution of the paper: the survey measures are shown to be behaviorally relevant, in the sense that they predict actual risk-taking behavior in our field experiment. Fourth, estimates of the coefficient of relative risk aversion for the sample provide support for the range of parameter values typically assumed in economic models. A fifth finding is that risk attitudes are strongly but imperfectly correlated across different life contexts. This provides some support for the standard assumption of a single underlying trait, but also points to a value-added from asking context-specific questions, in order to capture variation in risk perceptions. The sixth finding is that gender, age, parental education, and height have a qualitatively similar impact on risk attitudes in most contexts, but that the magnitude differs across contexts. A seventh finding is that the survey measures can predict a wide range of important behavioral outcomes, including portfolio choice, occupational choice, smoking, and migration. An eighth finding is that the general risk question is the best allaround predictor of these behaviors, outperforming a lottery measure or domain-specific measures. Ninth, the best predictor of behavior within a given context is typically a question incorporating the corresponding context, as opposed to a lottery measure or measures incorporating other contexts.

Demographic changes leading to a large population of elderly are predicted to lead to a more conservative pool of investors and voters, which could substantially influence macroeconomic performance and political outcomes, increase the resistance to reforms, and delay necessary but risky policy adjustments. In addition to adding to knowledge about risk attitudes, some of these findings have potentially important policy implications. A robust and pervasive gender difference in risk attitudes could play some role in explaining different labor market outcomes, and investment behavior, observed for men and women.

An age profile for risk attitudes was found to have important ramifications, at the macroeconomic level. Although it is found that risk preferences are relatively stable across situations, an age profile also raises questions about the stability of risk preferences over time. A role for parental education in shaping the risk attitudes of children highlights a potentially important role of education policy.



Extracted from:
Fowler, F. (1988): Survey Research Methods. Newbury Park, London.
Frey, B. S., and A. Stutzer (2002): Happiness and Economics: How the Economy and Institutions Affect Well-Being. Princeton University Press, Princeton and Oxford,
1st edn.36
Van Praag, B. M. S., and A. Ferrer-i Carbonell (2004): Happiness Quantified - A Satisfaction Calculus Approach. Oxford University Press, Oxford.
Weber, E., A. R. Blais, and N. Betz (2002): “A Domain-Specific Risk-Attitude Scale: Measuring Risk Perceptions and Risk Behaviors,” Journal of Behavioral Decision Making, 15, 263–290.
Byrnes, J., D. Miller, and W. Schafer (1999): “Gender Differences in Risk Taking: A Meta-Analysis,” Psychological Bulletin, 125, 367–383.
Camerer, C., and R. Hogarth (1999): “The Effects of Financial Incentives in Experiments: A Review and Capital-Labor-Production Framework,” Journal of Risk and
Uncertainty, 19(1), 7–42.

Oxfam launches ?1m Middle East Crisis Appeal

Oxfam today launches a Middle East Crisis appeal calling on the British public to donate ?1m for the charity?s work in Lebanon, northern Israel and Gaza. The appeal comes as the scale of the necessary relief effort begins to come to light. Thousands are returning to southern Lebanon where destroyed villages require a massive level of aid.

The money raised will provide life-saving clean water, safe sanitation and public hygiene to thousands who are now returning to their homes or who do not have homes to return to.

In Lebanon alone the aid effort faces a huge challenge, with nearly one million people displaced - a quarter of the country?s population. In three days, 200,000 people returned to their homes, or to the site of what was once their home. Roads are damaged, bridges are destroyed and the land in southern Lebanon is strewn with unexploded bombs, missiles and clustered bombs.

?The generous support of the British public is crucial to help us meet the needs of ordinary people affected by this conflict,? said Nick Roseveare, Oxfam?s Humanitarian Director.

?This has been a conflict where innocent civilians have almost exclusively borne the brunt of the fighting. In Lebanon a nation is on the move, returning to villages that are severely damaged, homes that no longer exist, communities that have been shattered ? the aid effort has to run to catch up and respond to this growing need,? he added.

During the past three weeks, an Oxfam team based in Beirut has already spent ?200,000 on providing food, clothes, hygiene kits and clean water to more than 12,000 displaced people in Beirut, Byblos, Lebanon Mountain, Bekaa Valley, Tyre, Tripoli and Saida. With the cessation of hostilities Oxfam?s team can now respond in southern Lebanon, where the needs are greatest.

Besides its work in Lebanon Oxfam will be supporting local organisations to assist poor communities who have suffered as a result of rocket attacks in northern Israel. In Gaza, where the crisis has been overshadowed by the recent conflict, Oxfam?s partner organisations will be providing water and sanitation facilities. Oxfam also has projects that are improving the amount and variety of food available in Gaza.

Stars call on public to support Oxfam?s appeal

"The bombs may have stopped falling, but the intense suffering goes on for thousands of people across the Middle East, who find themselves without a home, and without access even to the most basic provisions of safe water and basic hygiene. Oxfam's appeal will get countless people back on track towards an acceptable standard of living so they can begin the long journey of rebuilding their shattered lives," said Joanna Lumley.

"Although we now have the ceasefire we were all calling for, the scale of the crisis in the Middle East is only now becoming apparent. Hundreds of thousands are returning home only to find that they are living without shelter, without safe water and without basic hygiene. The suffering people of Lebanon will have many difficult years ahead trying to rebuild their lives. Please support Oxfam's appeal and donate as generously as you can - you will be making all the difference," said Chris Bisson, star of Coronation Street and Shameless.

"Even though the guns have now fallen silent across the Middle East, there is still so much to be done to restore even a basic standard of living to innocent civilians. Hundreds of thousands of people remain homeless, lacking even safe water and basic hygiene. By supporting Oxfam's appeal, you'll be helping countless people across the region to get back on their feet and start to live a normal, dignified life once more," said Jimi Mistry, star of the films East is East and The Guru.

What your donation could buy

?35 will provide hygiene kits for two families that contain soap, towels, washing bowls, sanitary pads and other essential items.
?50 will provide 20 buckets to store safe clean water.
?100 will provide hygiene kits for six families.

How to donate
To donate to the Oxfam appeal, the public can:

Call the appeal hotline: 0870 333 2500
Donate cash, credit card or cheque at any Oxfam shop
Donate online at: www.oxfam.org.uk

COMMON STOCK AS A HEDGE AGAINST INFLATION

Inflation has a profound impact on the real value of shares in the stock market. Rational investors respond to inflation by revising their expectations and adjusting their requied rate of return on one for one basis to maintain the real value of their assets. They also select a class of equities that are highly responsive to rise in the general level of prices. The risk of inflation or purchasing powe risk arises from error in investors’ prediction and when actual inflation deviates from expected inflation. A higher than expected inflation reduces share prices because of immediate jump in investors’ required rate of returns which, in turn has a negative impact on the present value of cash flow of the firms. Conversely a lower than expected inflation rate reduces investors required rate of return and will cause share prices to increase. Most financial analysts believe that tangible assets, such as real estate, gold and commodities are good hedge against inflation. Common stock wer also traditionally believed to be a good hedge against inflation because of the fact that their value represent a fractional ownership in the real assets of the companies. The theoretical base for this argument is an extended version of Fisherian Hypothesis FH which suggests that real return on stocks is determined by real variables andis independent of inflationary expectation. To date, however most previous studies have rejected this hypothesis and have documented that all measures of inflation are negatively correlated with share prices. This include the result of papers by Pearce et al (1988) and an article by Ely and Robinson (1989) that have tried to solve this puzzle and provide some theoretical explanations for this market anomaly. They include risk premium hypothesis, tax effect hypothesis, money illusion hypothesis and proxy hypothesis. No consensus of opinion has emerged so far to overwhelmingly support one hypothesis or another.

One study examines the impact of both expected and unexpected inflation on Iranian shares over the period 1991- 1995. the general price level in Iran has followed a steep upward trend in recent years as a result of rapid growth in liquidity, pressure from huge investments, especially in infrastructure, and adjustments in the exchange rates. This among other things has led the private investors towards rent seeking rather than genuine economic activities. It has become government priority to redirect investable funds to manufacturing through different procedures, including privatization of public companies and offering of their shares in the stock market. Obviously the success of this policy largely depends on whether return on shares is high enough to at least cover for inflation. Iranian shares are traded in Tehran Stock Exchange which was closed after the Revolution and reopened in oct 1989. Although, the en of war with Iraq in 1988 created substantial hope and positive sentiments in the market, the economic environment was still unstable and the future seemed uncertain to investors. Under such conditions, planning for large long term projects are sacrificed for smaller short term investments which can weaken investment growth. Iranian stock market was highly volatile from the beginning and investors were trading on the overwhelmingly short term positive technical dynamic which was fuelled by enormous liquidity. The excess demand for shares boosted the average share prices by nearly 500% during a period of more than two years (the Tehran Exchange Price Index TEPIX increased from 100 to 485 from March 1990 to May 1992. this boosted the average price earning ratio to such a level that did not seem to be sustainable in the long term. A market crisis which was expected for some time unraveled in late June 1992 and share prices dropped by 19.5% during aperiod of more than one year (TEPIX dropped from 485 to 391 between July 1992 and August 1993). From September 1993 TEPIX has followed an upward trend, again and reached to the record level of 1150 in December 1995.

Markets in developed economies usually follow the high growth rate, high inflation low growth rate, low inflation cycle. Empirical evidence from these markets indicate that stocks’ poor performance during inflationary periods is more than compensated by high real returns in periods of price stability. As a result, investors’ real return is positive in the long run. Iranian stock market has not experienced a period of price stability since it was reopened in 1989. Here, the important question is whether real return on shares is still low or negative when inflation becomes a long term phenomenon. Answer to this question has important implication for the success of government’s privatization policies and growth in private investments. Efficient Market Hypothesis EMH suggests that expected inflation is already embodied in share prices and only unexpected component of this variable may have a surprise impact on equities. Rational Expectation Hypothesis (hereafter REH), also suggests that share prices embody all available information and only move in response to those currently incoming information which have not been expected by market. Financial markets in developing countries are more restricted and information is not readily available to the public. As a result they are less likely to be efficient. We use these theoretical framework to shed some light on the extent of efficiency and rationality of Iranian stock market. Investing in gold and foreign currencies in the black market are a substitute for genuine long term investments during political and economic crisis. Present study compares the rate of return on equities with returns from investing in gold and foreign currencies. A superior performance of stock market is an indication of investors’ confidence in future economic stability. The contribution of private investment in economic growth is not limited to domestic investors. A comparison of findings indicated that foreign investors’ real return is higher than domestic investors. This is due to the fact that the value of foreign currency in the black market did not increase as fast as domestic inflation. It is needless to say that the estimated returns in this section suffer from the same type of short comings that appears in the calculation of real returns for domestic investors.
COMMON STOCK AS A HEDGE AGAINST INFLATION: From the First financial Seminar in Iran, Shahid Beheshti Univ., 1996