44 
BULLETIN 1480, U. S. DEPARTMENT OF AGRICULTURE 
Table 23 shows correlation studies of this kind with wheat, cotton, 
and potato prices. The entire period from the time monthly prices 
were started (1908 or 1909) through 1925 was divided into three 
periods: (1) the pre-war period (1908-1914) — a period during 
which the change in the general price level was not an important 
factor influencing the relationship between the two price series; (2) 
the war period, through deflation (1915-1921) — a period during 
which changes in price level, first upward and then downward, 
would tend to increase the correlation; (3) the postwar period (1922- 
1925) — a period during which changes in price level would have 
much less effect than during the second period, but perhaps more 
than during the first or pre-war period. Figures for the entire 
period are also given for the sake of comparison. 
WHEAT 
One would expect wheat prices in New York, Pennsylvania, and 
Maryland to run along together rather closely over a period of sev- 
eral months. The correlation coefficient is a useful measure of the 
relationship existing between such price series as these (11, p. 157- 
228). The plus correlation between Maryland and Pennsylvania 
wheat prices is unusually high, considering the small size of the 
Maryland sample. Maryland is a small State, and the number of 
reports received would naturally be fewer than from some of the 
larger States, and yet the movement of farm prices of wheat is very 
close to the movement of prices of wheat in the neighboring State of 
Pennsylvania. 
In fact, the correlation between the farm prices of wheat in Mary- 
land and in Pennsylvania is practically the same as that between 
wheat prices in Pennsylvania and in New York, period by period. 
These correlation coefficients range from plus 0.974 to 0.994. They 
are slightly higher during the war period, when great differences in 
price level were a contributing factor to the relationship. The 
correlation between farm prices of wheat in Illinois and in Indiana 
is slightly higher than that between either Maryland and Pennsyl- 
vania or Pennsylvania and New York. Figures 5 and 6 show the 
general trend and the close correlation between monthly wheat 
prices in these States for the entire period. 
Table 23. — Farm prices: Correlation betioeen the farm-price series of icheat, 
cotton, and white potatoes in neighboring States 
Crop, State, and date 
Number 
of 
reports 
Average prices for 
series 
Standard devia- 
tions for series 
Correla- 
tion co- 
efficient 
(r.) 
Xi 
Y2 
Xi 
Y2 
Wheat, per bushel : 
Maryland and Pennsylvania— 
1908-1914 
84 
84 
48 
216 
84 
84 
48 
216 
Cents 
98.3 
180.1 
126.0 
136.2 
99.1 
177.9 
125.6 
135.6 
Cents 
99.1 
177.9 
125.6 
135.6 
100.4 
178.8 
130.1 
137.5 
Cents 
9.6 
52.9 
25.6 
50.6 
9.2 
50.1 
24.4 
48.8 
Cents 
9.2 
50.1 
24.4 
48.8 
8.0 
51.4 
23.7 
48.9 
Plus 
0.975 
1915-1921 
.989 
1922-1925 
.989 
1908-1925 _' 
.994 
Pennsylvania and New York— 
1908-1914 
.974 
1915-1921 
.988 
1922-1925 
1908-1925 
.986 
.994 
i Indicates the series mentioned first, as Maryland in the first comparison. 
2 Indicates the series mentioned second, as Pennsylvania in the first comparison. 
