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Solar Physics (2004) 224: 473–481
Springer 2005
C
SPACE CLIMATE MANIFESTATION IN EARTH PRICES – FROM
MEDIEVAL ENGLAND UP TO MODERN U.S.A.
L. A. PUSTILNIK 1 , 2 and G. YOM DIN 3
1 Israel Cosmic Ray Center, Tel Aviv University and Israel Space Agency, P.O.Box 2217,
Katzrin, 12900, Israel
(e-mail: levpust@post.tau.ac.il)
2 Sea of Galilee Astrophysical Observatory, Jordan Valley College, 15132, Israel
3 Golan Research Institute, Katzrin, 12900, Israel
(e-mail: rres102@research.haifa.ac.il)
(Received 1 September 2004; accepted 8 October 2004)
Abstract. In this study we continue to search for possible manifestations of space weather influence on
prices of agricultural products and consumables. We note that the connection between solar activity
and prices is based on the causal chain that includes several nonlinear transition elements. These
nonlinear elements are characterized by threshold sensitivity to external parameters and lead to very
inhomogeneous local sensitivity of the price to space weather conditions. It is noted that “soft type”
models are the most adequate for description of this class of connections. Two main observational
effects suitable for testing causal connections of this type of sensitivity are considered: burst-like price
reactions on changes in solar activity and price asymmetry for selected phases of the sunspot cycle.
The connection, discovered earlier for wheat prices of Medieval England, is examined in this work on
the basis of another 700-year data set of consumable prices in England. Using the same technique as in
the previous part of our work (Pustilnik and Yom Din, 2004) we show that statistical parameters of the
interval distributions for price bursts of consumable basket and for sunspot minimum states are similar
to one another, as was reported earlier for wheat price bursts. Possible sources of these consistencies
between three different multiyear samples are discussed. For a search of possible manifestations of
the ‘space weather - wheat market’ connection in modern time, we analyze dynamics of wheat prices
in the U.S.A. in the twentieth century. We show that the wheat prices revealed a maximum/minimum
price asymmetry consistent with the phases of the sunspot cycle. We discuss possible explanations of
this observed asymmetry, unexpected under conditions of globalization of the modern wheat market.
1.
Introduction
A history of studying possible connections between space weather and storms in
Earth markets numbers more than 300 years (Swift, 1726; Hershel, 1801; Jevons,
1878). In the last years, this problem received a new impulse caused by the dis-
covery of causal connections between the cosmic ray flux penetration in the Earth
atmosphere, and cloudiness (Svensmark and Friis-Christensen, 1997).
In our previous research (Pustilnik and Yom Din, 2004), we reconsidered pos-
sible causal connections between solar activity and wheat prices. It was shown that
a complex causal chain may have taken place. This chain includes a number of el-
ements, while its basis is the influence of solar activity on the weather state caused
by modulation of galactic cosmic rays propagated into the solar system to the Earth
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L . A . PUSTILNIK AND G . YOM DIN
Figure 1. A possible causal connection between space weather and price bursts.
and their penetration into the Earth’s atmosphere. As follows from the study of
Svensmark and Friis-Christensen (1997), ions and radicals in the air formed by
cosmic rays can be considered as one of essential factors of vapor condensation
and cloud formation; their modulation can lead to corresponding variations of the
earth weather. 1
From the other side, these weather abnormalities can lead to drops of agricultural
production in regions of high risk agriculture, with corresponding market reactions
in the form of price bursts. As a result, a causal chain between solar activity and
prices of agricultural products can be presented as a sequence of a number of
elements (Figure 1).
A main feature of this chain is a nonlinear type of sensitivity of the last ele-
ments of this scheme (marked by large arrows with solid lines). This may lead to
step-like transition processes when a small variation of input parameters causes a
catastrophic-like transition of the whole system. For example, cloudiness forma-
tion caused by the vapor condensation in presence of ions and radicals generated
by cosmic rays is very sensitive to vapor concentration, temperature and pressure. 2
2 This explains a quite inhomogeneous geographical distribution of the sensitivity
of “CW” to “CR” (Figure 1), with a few local spots of very high correlation and
extended regions of low correlation (see Figure 8 in Fastrup et al ., 2000). Another
element with nonlinear sensitivity is a “CW”–”AG” transition that reflects the reac-
tion of agricultural production on weather abnormalities. This process takes place
only in regions of high risk agriculture sensitive to weather conditions. Additional
parameters here are an agricultural crop and its dynamical range of sensitivity to
weather (oat, for example, is more resistant to weather disturbances than wheat
and less sensitive to the “CW”–”AG” transition). The market state, in turn, is very
sensitive to the last transition element shown in Figure 1 (price burst reaction on
deficit or excess of agricultural production). We wish to note here that existence of
reserves and access to external markets with low transfer costs (a global market)
will suppress the market sensitivity to disturbances of local supply.
1 We wish to point out here that the statement about the connection ‘cosmic radiation/cloud
cover’ is a controversial subject (see discussion in studies of Laut, 2003;, Palle and Butler, 2002;
Tsiropoula,2003).
2 This explains rigorous requirements of vapor condensation, pressure and temperature, necessary to
make cosmic ray tracks observations in Wilson camera – analog of cloud formation. Deficit of vapor
leads to an absence of any condensation at all, but if the vapor concentration is too large, condensation
will take place all the time, independently of external factors and additional input caused by cosmic
rays.
1249705686.001.png
475
SPACE CLIMATE MANIFESTATION IN EARTH PRICES
As a result, the multi-element chain of the causal connection (Figure 1) cannot
be described by “hard type” models with univocal relations like Y
=
kX
+
Noise, or
= k i X i
more generally, Y ( n )
Noise, where X i - input variables (space weather
parameters, conditions in the Earth atmosphere, market characteristics,
+
), Y - the
output reaction (market prices, social outcomes, famines), k i - the coefficients of
connections, ( n ) - the order of derivatives.
On the contrary, this multi-element chain requires “soft type” models for its
description when the coefficients of connections k i depend on the input variables
X i and the output reaction Y :
Y ( n )
...
k i ( X
X i
.
This situation is typical for “catastrophy theory” (Arnold, 1992) and requires in-
cluding into consideration hidden parameters of the system. The system’s behavior
is very sensitive to its location in the multi-dimensional space of X i .
Regarding the problem of space weather influence on Earth prices, the soft type
of the relationship leads to high sensitivity of this connection to the following
important parameters: distribution of vapor in the Earth surface determined by
global climate and atmospheric circulation; resistance of the agricultural production
to weather conditions (crops and their varieties, agro technique and genetics); active
participation of the local market in the globalization process (due to cheap shipping
costs and low customs). Since all these parameters are very inhomogeneous in space
and vary in time on the scale of hundreds of years we can expect that the sensitivity
of the market to space weather will be unstable. This sensitivity can take place from
time to time in specific regions, when and where all these parameters (density of
vapor in atmosphere, state of high risk agriculture, market isolation and restricted
external supply) will have occurred simultaneously in one region.
The market behavior expected according to the presented scheme (Figure 1) has
to demonstrate the following two types of reactions to the space weather state:
1. The burst-like price reaction to the crucial combination of the above-
considered important parameters. These price bursts are most probable in
specific phases of solar activity (minimal or maximal sunspot number) that
lead to the most unfavorable states of weather for concrete agricultural crops
under concrete local market conditions. Possible types of market reactions
were discussed in detail in Pustilnik and Yom Din (2004) and presented in
Figures 3 and 4 in that work.
2. Min/Max price asymmetry – systematic differences between prices in min-
imum and maximum states of solar activity, caused by the opposite sign
of space weather influence on the market in these opposite states of solar
activity.
For analysis of concrete situations we have to take into account global atmo-
spheric circulation that transfers clouds from their birth region to thousands kilo-
meters away (for example, from north Atlantic to east Siberia) may lead to a time
lag in weather sensitivity to cosmic ray/sunspot activity, in spite of the vapor state
=
,
Y )
∗
+
Noise
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L . A . PUSTILNIK AND G . YOM DIN
being far from critical in these distant regions. Another factor of possible increase
in system sensitivity to space weather is compactness of agricultural production
zones. Clearly, regional sensitivity of crops to weather conditions is much stronger
for those that are localized in small and compact regions (hundreds of kilome-
ters) than for those dispersed on thousands of kilometers (where average weather
variations are much smaller).
On the basis of this description we can conclude that standard methods of
statistical inference (regression/correlation, Fourier analysis) may be ineffective
for a search for a “space weather-price level” connection. Identification of space
weather manifestations through Earth markets requires application of another ap-
proach based on the event statistics. As was shown in the previous part of our work
(Pustilnik and Yom Din, 2004), adequate methods for this purpose can include
(a) statistical study of time intervals between price bursts and (b) search for price
asymmetry. Application of this approach to the isolated wheat market of Medieval
England has shown the existence of space weather influence on prices both for price
burst statistics and for price asymmetry. At the same time, for more reliability we
need to test this fact on other independent samples of prices for the same historical
period. Another side of the problem is possible manifestations of the “space weather
- market state” connection for modern conditions, when market globalization and
increased agriculture resistance to unfavorable weather conditions obviously can
diminish the weather influence on prices.
2.
Sources of Data
To test our assumptions about the influence of solar activity on prices we used the
following two additional databases of prices:
(a) The first is the Composite Unit of Consumables (CUC) in England for seven
centuries, 1264–1954 (Brown and Hopkins, 1956). In this database, the ‘fari-
naceous’ item includes wheat, rye, barley, peas, and, in the twentieth century
– wheat and potatoes. The item ‘farinaceous’ constitutes 20% of the CUC
and wheat constitutes 37– 49% of farinaceous. The CUC is expressed as an
index (CUC for the years 1451–1475
100). Main sources of data for wheat
prices in the study of Brown and Hopkins were Rogers (1887) and Beveridge
(1939), and from the beginning of the nineteenth century, wholesale prices
in organized markets. Since the contribution of wheat to the CUC is less than
10%, data from the CUC and data on wheat prices are independent of one
another for our purposes.
(b) As the second data set for testing the efficacy of the proposed causal chain
under conditions of the modern wheat market we used the USDA (2004)
database that contains average yearly prices in US$ per bushel (Figure 4) re-
ceived by farmers in the U.S.A. for wheat (durum, spring, winter, other kinds,
total).
=
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SPACE CLIMATE MANIFESTATION IN EARTH PRICES
3.
Results and Discussion
3.1.
E FFECTS OF SUNSPOT ACTIVITY ON THE CUC
The dynamics of CUC for about 700 years is shown in the upper part in Figure 2.
This period includes several major global-affecting changes in socio-economic
conditions (Columbus’ discovery of America, continental wars, World Wars I and
II). We chose to analyze only part of the available CUC prices, namely 1260 –
1720 (Figure 2, bottom part), as that was the basis for the first part of our research
(Pustilnik and Yom Din, 2004).
During the next step we repeated the data analysis, as it was made in the first
part of our research for wheat prices: restoration of the slow trend component
with the following normalization of CUC prices by this slow component gave us
relative variations of CUC prices; the noise component was filtered from the burst
component by amplitude discrimination (the level of 27.5% was used); the largest
CUC price bursts were identified for each 11-year period.
Finally, means, medians and standard deviations of inter-burst time intervals
were calculated (Table 1). The statistical parameters for three used interval distri-
butions (Composite Unit of Consumables, wheat prices, and “minimum sunspot”
states) are very similar, and the hypothesis that all three samples have the same
nature (are taken from the same statistical population) cannot be rejected on a 0.01
significance level.
Another indication of the common nature of CUC price bursts, wheat prices
bursts and sunspot minimum states is illustrated in Figure 3 where three histograms
of the interval distributions for the considered samples are shown. Comparison
of
2 -criterion
the
histograms
with
χ
enables
accepting
of
the
hypothesis,
Figure 2. Composite unit of consumables (CUC) index for the studied period (1260 –1720). These
prices are consistent with wheat prices in Medieval England reported by Rogers (1887). Inset : the
CUC for 1260 –1954.
1249705686.002.png

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