Detailed statistical investigation indicates that commercial butcher hogs are bought on too nearly a "flat price" basis; the differences between the values of different lots of butcher hogs are greater than the differences between the prices paid for them. Within each weight class the variations in value may be as much as five times as great as the variations in prices paid. The correlation between values and prices, lot by lot within each weight class, is rather low. It ranged from +.34 to +.56 in the cases studied.

The reason for the inaccuracy of the prices paid for hogs on the live weight basis is two-fold: (1) It is difficult for the buyer to detect value differences accurately on the hoof, no matter how experienced he is, and (2) it is even more difficult for farmers to do so. Accordingly farmers are reluctant to accept discounts for low-grade hogs. It is difficult for the buyer to detect value differences accurately in the first place and difficult for him to register those differences in proper premiums and discounts. He therefore pays close to the average for all but the obviously defective hogs in each weight range. Both of these reasons stem from the fundamental impossibility of appraising hog values accurately on the hoof.