FACTORS AFFECTING THE PRICE OF HOGS 
41 
long period, a sufficient number of complete cycles was included to 
eliminate any appreciable error in the seasonal averages due to the 
cyclic variation. No attempt was made to determine whether 
there had been any change in the seasonal variation over the period. 
It is probable that the normal seasonal variation during recent 
years has been less marked, as marketings have been more evenly 
distributed through the year recently than they were in previous 
decades. 
Figure 28 shows the normal seasonal variation as determined for 
this pre-war period. 
The receipts and time gave a multiple correlation with the price 
thus deflated for price level and seasonal variation of Ri 7 .i 5 ,i 6 = 0.827. 
Tests by the approximation method showed no perceptible curvilin- 
earity to the regression of price upon receipts. Leaving demand 
factors out of consideration apparently was sufficient to mask the 
Seasonal movement in heavy Hog Prices at Chicago 
1896-1915 
PERCENT 
105 
100 
95 
90 
NOV. DEC. JAN. FEB. MAR. APR. MAY JUNE JULY AUG. SEPT. OCT. NOV. 
Fig. 28.— Normal seasonal variation in the price of heavy hogs, as determined for the pre-war 
period. This shows the average variation from month to month, after eliminating the changes 
due to secular and cyclic variation 
usual curvilinear function for the relation of supplies to price. The 
expected price was then estimated on the basis of the multiple regres- 
sion equation just discussed, and the actual price divided by this 
estimated price to obtain the index of total demand. Letting X'i 7 = 
the estimated price, the index of demand, X 20 , was obtained by the 
equation 
100^- = X 20 
.A 17 
The index of total demand thus expresses the percentage which 
the actual price was of the normal price for the receipts at the time, 
upon the basis of the linear demand curve. 2 o 
Y£ 
■ARL) 
'AVE 
RAGE 
' = /OC 
) 
N 
! 
-J 
20 Though satisfactory as a rough index, this method of computation is open to criticism on the grounds 
that only the moving trend of market supply was considered, and that deviations in price due to" devi- 
ations in supply for a given month from the normal for that month (seasonal allowed for') are left to be re- 
flected in price. For this reason the index is a much better measure of the general trend or level of demand 
than it is of demand for individual months as such. 
