Define: Joseph Effect

UK Accounting Glossary

Definition: Joseph Effect


Quick Summary of Joseph Effect


The idea that movements in a time series tend to be part of larger trends and cycles more often than they are completely random. The Joseph Effect is quantified by the Hurst component, where movements fall between a Hurst range of 0 to 1. The term was coined by Benoit Mandelbrot.



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Full Definition of Joseph Effect


The Joseph Effect is the idea that movements over time follow statistical trends and cycles more than they occur at random. To determine whether a series of movements is random or part of a trend, the Joseph Effect uses the Hurst component: the Joseph Effect observes these movements between the Hurst range of 0 to 1. The Joseph Effect says that movements falling between 0 and 0.5 are larger and more random than normal random movements. The Joseph Effect then says that movements falling between 0.5 and 1 are part of a long-term trend. The time series in the Joseph Effect thus looks like this: 0.5


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Definition Sources


Definitions for Joseph Effect are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 9th February 2020.