Android - What is this "shadow" called and what's the purpose?

This appears to be called EdgeEffect and is used as a visual indicator when the user over-scrolls.

• See relevant images on Google Images here.
• A book commenting on the glow effect produces.
• A question on Stack Overflow.

As suggested already, this graphical "shadow" effect is Edge Glow colour, and its part of the material design by Google.

After the introduction of material design by Google many new UI elements have been introduced. Material design is based on the interaction and movement of colours and objects in real world rather than synthetic unnatural phenomenon. Sometimes it gets messy when we try to keep up with our material aesthetic. The most popular example of it is edge glow colour.

The effect was introduced in the ice cream sandwich (api 14) android version. Its part of Material design's aesthetic appeal. The edge glow colour of ListView, RecyclerView, ScrollView and NestedScrollView is managed by the accent colour declared in the styles.

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