Where does holiday collide?

In financial economics the holiday effect is a calendar anomaly: average stock returns on the trading days immediately before public holidays are systematically higher than on ordinary days, a pattern inconsistent with a strictly efficient market. Ariel's 1990 High stock returns before holidays documented the effect across decades of U.S. data and weighed possible causes. Here the referent is a statistical regularity in asset prices tied to the calendar, measured as an abnormal return around holiday dates, a wholly different construct from a gap in a paint film.[1]

Unit

Abnormal return on the trading day before a holiday

Recovery means

Not applicable

Measured by

Estimated as mean excess return on pre-holiday trading days versus other days across a long price series

In public finance a tax holiday is a policy instrument: a government grants a temporary exemption from, or reduction of, a tax (often corporate income tax) for a fixed period to attract or encourage investment. Mintz's 1990 Corporate tax holidays and investment analysed how such holidays actually affect a firm's incentive to invest, showing the benefit can be smaller or even negative once depreciation and financing interactions are counted. The referent is a time-limited fiscal concession evaluated by its effect on investment and revenue, unrelated to a coating defect or a market anomaly except for the common notion of a suspension.[2]

Unit

Duration and rate of the tax concession granted

Recovery means

Not applicable

Measured by

Assessed by the effective tax rate during the holiday and the induced change in investment and forgone revenue