Effects of Easter and Yom Kippur on Quarterly Earnings and Returns

Abstract

I examine whether Easter and Yom Kippur affect quarterly operating earnings and stock returns of airline and hotel firms. Easter (Yom Kippur) is determined by the lunar phases, and falls in either March or April (September or October). This shift between months may impact airline and hotel firms because of the consumers’ traveling behaviors associated with each holiday. Using seasonal random walk models, I find that airline (hotel) firms have higher (lower) operating earnings in quarters with Easter (Yom Kippur) compared to prior year same quarters without Easter (Yom Kippur). Three-month buy-and-hold raw returns for both holidays show similar results.