Furthermore, the cost of living in state j, COSTj, is shown in column (a) to be an increasing function of the annual number of cooling degree days
(CDDj), median family income (MEDFAMINCj), and population density (POPDENj).
Where [HDD.sub.r] and [CDD.sub.r] are monthly heating degree days and cooling degree days
respectively for region r.
Currently only heating and cooling degree days
have futures contracts.
One of the easiest ways to document the relatively harsher climate of the 7-G states is through the use of heating and cooling degree days
. (13) Heating degree days calculate the daily variation in temperature at a location below 65 degrees Fahrenheit, while cooling degree days
calculate the variation above 65 degrees.
* Cooling degree days
: Measured as the number of degrees by which the average temperature exceeds 65[degrees]F.
Until recently, many deals were based on an index of heating degree days and cooling degree days
that measured the demand for heating or cooling within a twenty-four-hour period.
where t-values are in parentheses; [COL.sub.j] is the cost of living for an average consuming unit in area j in 1995; [AREA.sub.j] is the geographic area of area j, expressed in square miles; [PCINC.sub.j] is per capita income in area j in 1994; [CHOPP.sub.j] is percentage change in population in area j from 1990 to 1994; [UN.sub.j] is the average unemployment rate in area j in 1995; [HDD.sub.j] is the average number of heating degree days in area j per year; [CDD.sub.j] is the average number of cooling degree days
in area j per year; and [RW.sub.j] is a binary (dummy) variable to indicate whether area j is principally located in a state with right-to-work laws.
Looking back at the Phoenix Swap, this time with reconstructed data, AIR found that there now was an 86% chance that the contract would settle below 4,250 cooling degree days
. "So this was not a 50-50 deal but more like 86-14," Gibbas said.
The new procedure uses data on heating and cooling degree days
to model the effects of weather more accurately in those industries.
Cooling degree days
are commonly used in studies of regional wage variation as a broad measure of climate throughout the year, while average January and July temperatures are included to account for seasonal extremes.
 reported that precipitation, humidity, heating degree days, and cooling degree days
were negatively related to housing expenditures - a proxy for land values - while wind speed, sunshine, and being close to the coast were positively related.