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Can't wait to celebrate: Holiday euphoria, impulsive behavior and time preference

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  • Lahav, Eyal
  • Shavit, Tal
  • Benzion, Uri

Abstract

The pre-holiday effect is a well-documented phenomenon, especially for financial markets. The behavioral explanation for the pre-holiday effect is called “holiday euphoria.” In the current paper, we examine how the holiday period influences the time preference of students, by comparing their subjective discount rate before and after the Passover holiday in Israel. Although there is considerable research on the pre-holiday effect and its influence on investors in the capital market, we are unaware of any prior research on the influence of the pre-holiday effect on time preference. Our results suggest that holiday euphoria induces impulsive behavior, making people more present-oriented (having a higher subjective discount rate) before the holiday. We also show how holiday euphoria affects people's immediate mood (feeling down in the present), and how it is affected by their level of pessimism.

Suggested Citation

  • Lahav, Eyal & Shavit, Tal & Benzion, Uri, 2016. "Can't wait to celebrate: Holiday euphoria, impulsive behavior and time preference," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 65(C), pages 128-134.
    • Handle: RePEc:eee:soceco:v:65:y:2016:i:c:p:128-134
    DOI: 10.1016/j.socec.2016.07.004
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    7. Razvan STEFANESCU & Ramona DUMITRIU, 2018. "Changes in the stocks prices behavior before and after the public holidays: case of Bucharest Stock Exchange," Risk in Contemporary Economy, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, pages 189-202.
    8. Goodell, John W. & Kumar, Satish & Rao, Purnima & Verma, Shubhangi, 2023. "Emotions and stock market anomalies: A systematic review," Journal of Behavioral and Experimental Finance, Elsevier, vol. 37(C).
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    More about this item

    Keywords

    Time preference; Discount rates; Delay discounting; Pre-holiday; Holiday euphoria;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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