Page 638 -

15.1 An Initial Taste of the Orange Juice Data 637

Figure 15.1 Orange Juice Prices and Florida Weather, 1950–2000

Price index Percent 1970 1980 1990 2000
250 50 Year
40
200 30
20
150 10
0
100 -10

50 -20
-30
0 -40
1950 1960 1970 1980 1990 2000
1950 1960
Year
(a) Price Index for Frozen Concentrated Orange Juice (b) Percent Change in the Price of
Frozen Concentrated Orange Juice

Freezing degree days

40

35

30

25

20

15

10

5

0 1960 1970 1980 1990 2000
1950 Year

(c) Monthly Freezing Degree Days in Orlando, Florida

There have been large month-to-month changes in the price of frozen concentrated orange juice. Many of the large
movements coincide with freezing weather in Orlando, home of many orange groves.

The percentage price change plotted in Figure 15.1b is the percent change in the
price over the month. The temperature data plotted in Figure 15.1c are the
number of “freezing degree days” at the Orlando, Florida, airport, calculated as
the sum of the number of degrees Fahrenheit that the minimum temperature
falls below freezing in a given day over all days in the month; for example, in
November 1950 the airport temperature dropped below freezing twice, on the
25th (31°) and on the 29th (29°), for a total of 4 freezing degree days
3(32 - 31) + (32 - 29) = 44. (The data are described in more detail in Appen-
dix 15.1.) As you can see by comparing the panels in Figure 15.1, the price of
orange juice concentrate has large swings, some of which appear to be associ-
ated with cold weather in Florida.
Electronic Publishing Services Inc.
Stock/Watson, Econometrics 1e
STOC.ITEM.0047
Fig. 13.01,a-c