Pure higher-order effects in the portfolio choice model

This paper examines the effects of higher-order risk attitudes and statistical moments on the optimal allocation of risky assets within the standard portfolio choice model. We derive the expressions for the optimal proportion of wealth invested in the risky asset to show they are functions of portfolio returns third- and fourth-order moments as well as on the investor’s risk preferences of prudence and temperance. We illustrate the relative importance that the introduction of those higher-order effects have in the decision of expected utility maximizers using data for the US.

A voice for change? Trust relationships between ombudsmen, individuals and public service providers

There has been a debate for years about what the role of the ombudsman is. This article examines a key component of the role, to promote trust in public services and government. To be able to do this, however, an ombudsman needs to be perceived as legitimate and be trusted by a range of stakeholders, including the user. This article argues that three key relationships in a person’s complaint journey can build trust in an institution, and must therefore be understood as a system. The restorative justice framework is adapted to conceptualize this trust model as a novel approach to understanding the institution from the perspective of its users. Taking two public sector ombudsmen as examples, the article finds that voice and trust need to be reinforced through the relationships in a consumer journey to manage individual expectations, prevent disengagement, and thereby promote trust in the institution, in public service providers, and in government.