94 Economic Cycles: Their Law and Cause 



The Prices of Agricultural Commodities Correlated with 

 the Yield of the Several Crops 



The method employed in the preceding chapter to 

 derive the law of demand of the several crops contained 

 two stages : As a first stage, the correlation between the 

 relative change in the total supply and the correspond- 

 ing relative change in price was assumed to be linear, 

 and upon the hypothesis of linearity of regression, the 

 demand curve was computed and the degree of accuracy 

 with which prices might be predicted from such linear 

 demand curves we showed how to measure. The second 

 stage in the theory of demand curves was to assume a 

 skew relation between relative changes in price and 

 supply, and we found that the degree of accuracy with 

 which prices might be predicted from the skew demand 

 curves was greater than when the law of demand was 

 assumed to be linear. We shall follow these two stages 

 in treating the relation between the yield per acre and 

 the price of the crops. 



If the correlation between the relative change hi 

 yield per acre and the relative change in price is as- 

 sumed to be linear, we obtain for the coefficients of 

 correlation in case of the four typical crops, the values 

 placed in the first row of the accompanying Table, 

 which, for purpose of comparison, also presents the 

 corresponding coefficients in case of the linear demand 

 curves. 



