FACTORS AFFECTING THE PRICE OF HOGS 
29 
Durini 36 / years 1924 and 1925 the hog market seems to have re- 
turned ^ closely to pre-war conditions than at any intervening 
time. Figure 24 shows the actual monthly prices of heavy hogs at 
Chicago for the period July, 1924, to January, 1926, together with 
hog prices estimated from the four factors of six months or more 
earlier, with forecasted prices through to June, 1926. These fore- 
casts were obtained by using the pre-war estimating equation (given 
in detail in the subsequent statistical section) and assuming a flat 
trend for the price of hogs at such a level as to give the 1924 and 1925 
estimated prices the same average- as the actual prices. Although 
the two curves are not so close as they were for the pre-war data, they 
do show a striking similarity. 
For the 19 months for which both figures are given, there is a cor- 
relation of 0.806 between the actual and estimated prices, showing 
HOG PRICES, 1924-1926, AND PRICES FORECASTED 
BY PRE-WAR FORMULA 
PRICES PER 
100 LBS. 
DOLLARS 
12 
10 
A. S. O. N. 
1924 
M. A. M. J. J. A. S. O. 
1925 
A. M. J. J. A. S. 
1926 
O. N. O. J. 
Fig. 24.— Application of forecasting formula, computed for the pre-war period, to 1924 and 1925. 
The movements in actual prices during this period preceded by several months the movements 
indicated on the basis of the pre-war relationships 
that the latter shows 65 per cent of the variation of the former, in 
contrast to 88 per cent for the pre-war comparison. 
Widespread publicity given the pig-survey figures has tended to 
make the hog market more responsive to future changes in receipts 
than it has been in the past; hence the relative importance of the vari- 
ous factors determining the price is probably somewhat different than 
it was for the period shown in Figure 22. Thus it is noticeable in 
Figure 24 that the upward price movement in 1924, and the down- 
ward movement in 1925, both actually occurred some months earlier 
than would have been expected on the basis of the pre-war relations 
alone. 
As soon as the pig survey has been in operation for a period of time 
long enough to get a satisfactory measure of the market's response to 
this new factor it should again be possible to make a highly accurate 
forecast of hog prices on a mathematical basis. 
