FACTORS AFFECTING THE PRICE OF HOGS 33 
But it seems that at least the following generalizations can be stated 
as proved, though the specific quantitative relations found may be 
subject to modification with further investigation. 
(1) Between successive periods, with other factors remaining the 
same, the price of hogs is a function of the supply, a given change in 
supply causing a proportionately smaller change in price. 
(2) The curve expressing this function, which corresponds to the 
classical economist's conception of the relation of price to the quan- 
tity demanded, is negatively inclined, with an average elasticity of 
about 1.6. 
(3) The general level of the demand curve for hogs was moving up- 
ward during the decade preceding the World War. Since the war, 
its movements have been so irregular as to make its present position 
or trend largely indeterminate. 
BASIC DATA 
Tables 1 and 2 in the appendix give the basic data used in this 
study and the sources from which obtained. Much of the price 
data consists of unweighted averages, but that is all that is available 
for the early periods. The figures on receipts and slaughter are 
necessarily subject to some degree of error, and include only part of 
the actual production of hogs, but represent the best available infor- 
mation on the subject. It is probable, too, that the market receipts 
and inspected slaughter represent more the forces to which the mar- 
kets respond than does the total slaughter, including that on farms 
and in purely local establishments. These tables also contain cer- 
tain series of derived figures referred to at various points in the 
statistical discussion. 
DEMAND CURVE AND TREND OF DEMAND 
A statement of the demand curve and the trend of demand (note 
assumptions 4 and 5) was obtained by a multiple correlation study of 
the relation of supply to price for the period 1907 to June, 1914. 
The slaughter under Federal inspection was used as the best available 
measure of commercial production. 
The following factors were included: 
Xi Total live weight of hogs slaughtered monthly, adjusted to a 30-day month. 
X 2 Average of Xi for previous six months (cumulative average) . 
X3 Moving average of Xi (X 2 centered). 
X4 Storage of pork provisions, adjusted to eliminate normal seasonal varia- 
tion. 14 
X 5 Index of business cycles. 
X6 United States population. 
X 7 Price of steers-^ Bureau of Labor Wholesale Price Index. 
X 8 The index of European demand (explained on page 39). 
14 In discussing the factors influencing the demand for a given product it is necessary to have a clear 
understanding of the precise point in the marketing process at which the demand is to be measured. Thus 
if the demand of consumers for hog products was under consideration, the supply of hogs at the market, 
the quantities of hog products in storage, and the quantities of products in the hands of wholesale or retail 
dealers would all constitute part of the supply. The only factors which could be considered demand 
factors would be those which would influence the willingness of consumers to pay certain prices for certain 
quantities of pork or lard, such as the extent of unemployment; the price of alternative products, like beef, 
veal, or vegetable oils; and similar factors. Likewise, in considering the factors which influence the de- 
mand for live hogs in the central markets, it is necessary to take account of the factors which influence 
the buyers in making their bids for the animals received at the market. Although the price for which they 
can sell the products at wholesale is certainly one of the most important factors, the supply of hog products 
in storage is another important factor. If their reserve supplies are very low, and if prices are steady or 
rising, bidding will be much more active— the level of demand will be higher— than it would be if storage 
stocks were heavy. At this point in the marketing process the stocks in storage constitute a factor affecting 
demand; from the point of view of the consumer they are merely a part of supply. 
2470°— 26t 5 
