The Easter Effect

In behavioral finance, a lot has been written on the ‘holiday’ effect, the finding that stock prices tend to increase just before holidays, including before Easter. In retail sales statistics, the Easter effect means that either March or April will have higher than normal sales, depending on whether Easter was in March or April. On Friday April 2, I noticed an Easter effect on the Ukrainian markets for fresh vegetables (at least on the Zhitniy Rinok). Peppers had increased from UAH 35 a Kg to UAH 50 a Kg compared to a week before, cucumbers from UAH 22 to UAH 30. From an economic point, this is not that surprising giving the increased demand for fresh vegetables before Easter should indeed be expected to an increase in prices. At the same time, the extent of the increase, and especially, the fact that all sellers on the market were charging the same price suggest that this market functions far from perfect.