Declining Orange Consumption in Japan: Generational Changes or Something Else?
by Hiroshi Mori, Dennis Clason, Kimiko Ishibashi, William D Gorman, and John Dyck
Economic Research Report No. (ERR-71) 29 pp, February 2009
Japan, a leading market for U.S. oranges, has registered
declining consumption of oranges, and fresh fruits in general, in
recent years. At the same time, Japan's economy has seen little
growth and its demographic changes have been profound as its
elderly population has increased rapidly as a share of the
country's total population. The effects of aging and of
generational change on food consumption appear to be major factors
affecting orange consumption in Japan.
What Is the Issue?
Since about 1995, orange consumption (in aggregate and per
person) has fallen in Japan. One theory attributes that decline to
the aging of the population and the fact that younger Japanese eat
fewer fresh oranges than older Japanese. Orange prices and income
levels are also cited as factors that may be contributing to the
dropoff in orange consumption over time. Suppliers to Japan's
orange market, largely U.S. growers, may benefit from information
on factors triggering the decline as they plan future market
strategies in Japan and in such countries as South Korea, which is
also characterized by an aging population.
What Did the Study Find?
As individuals in Japan grow older, they eat more oranges;
however, older generations of Japanese are being steadily replaced
by younger generations who, overall, eat fewer oranges. On balance,
the effects on consumption associated with aging and birth cohort
membership are mostly offsetting. Prices affect orange consumption
in Japan, but household income does not. Even after the analysis
accounted for price and demographic variables, a strong downward
trend was evident in Japanese orange consumption.
Specific findings include the following:
• Studies show that as Japanese age, they eat more oranges.
Thus, today's Japanese youth are likely to increase their orange
consumption as they grow older. The aging of Japan's population
therefore has a positive effect on orange consumption.
• This analysis estimates, however, that, even in old age,
today's younger Japanese will not match the level of orange
consumption of today's elderly Japanese. The generational
replacement of older birth cohorts by younger birth cohorts
therefore has a negative effect on orange consumption in Japan.
• Orange prices in Japan dropped during 1987-95, the first half
of the period studied. Orange consumption increased until 1995,
perhaps partly in response to the price drops. Price changes since
1995 have been slight. Orange prices have a significant effect on
• The analysis revealed a strong trend away from orange
consumption over time, which was not explained by the effects of
demographic variables, prices, or household income.
How Was the Study Conducted?
The study relied on data from Japan's Family Income and
Expenditure Survey, which collects information on daily
expenditures from 9,000 households each month. The survey has
gathered information on orange consumption since 1987. The data are
reported based on age of the head of the household. Aggregate
household orange consumption, rather than consumption by each
household member, is reported. The study used detail on the ages of
the members of each household to estimate consumption by individual
members of different ages. These data were the basis for estimates
of age/period/cohort effects. Estimates of consumption per person
with the age and cohort (generation) effects netted out were used
to investigate "period effects": events, such as price and income
changes, that could affect consumption in a given year. These
time-series regressions (on own price, income, and a measure of
time) determined an estimate of the price elasticity of oranges, as
well as a time trend.
Since income elasticity was not significantly different from
zero in the time series investigation, various cross-sections of
the household data were sorted by income for further study. These
cross-sections also failed to show a strong influence of income on
orange consumption in Japan. Demographic variables were used to
project consumption to 2017, to examine the extent to which they
could lead to further declines in consumption, in the absence of