Tuna Economics

Few days ago I came across this quote:

[…] Japan’s Kansai region consumers are much more “price elastic” to tuna sashimi than Tokyo region consumers […]

First of all, what is price elasticity?
formulapriceelasticity Or, in how far a change in price of a product does affect the consumer’s demand of that same product. If the demand’s increase or decrease is more than proportional (Ed > 1%), the product is price elastic. If less than proportional (Ed < 1 %), we get a price inelastic product.

In case of a price change of tuna, consumers in Osaka seem to react more strongly by buying more or less tuna than consumers in Tokyo. Why is that?

Bigeye_tuna_dishI had a hard time finding some information on this topic. It seemed that tuna is enjoyed all over the country (Japanese eat 80% of the caught quantity world-wide), but it is true that tuna consumption in the east and south is considerably higher than in the west. The variation lies in the tuna species. Different regions prefer different species, due to location and cultural preferences. The author of the quote probably meant “bigeye tuna” as fish demanded by Tokyo, and “yellowfin tuna” preferred by Osaka. The biggest deal of tuna is caught in the Pacific ocean, but to my surprise, Japan also does some fishing in the Atlantic and Indian ocean. As a result, merchants in Tokyo have easier access to all kinds of tuna (The Kanto region stands for 180% of the national average). On the West coast, mackerel and white-flesh fish are very popular.

For traditional sashimi (刺身) three kinds of tuna are used: bluefin, yellow fin and tuna. Tuna_sashimiRegional preferences include colour and fat, that’s to say, red and fat fish in Tokyo and pink-coloured and less oily species in Osaka. But, preferences started to change gradually since the ’80. Next to that, tuna consumption has generally dropped by approximately 10%, in parallel with a declining number of sushi restaurants. The reason is obvious: overfishing, fortified by a lax of quota’s.

I think we can conclude that tuna, or more specifically, big eye tuna has become more price elastic in Tokyo. This is normal, because traditional preferences change continuously in times where nationwide distribution is an easy matter. Although this post may seem a bit technical and complex, I think that it is still interesting to see how cultural preferences have influence on the economy.

Facts for Fun

– There are some funny differences in food culture. In Osaka for example, it is absolutely not done to dip your meat in the sauce container, as it is shared with the other diners. In Tokyo, everyone has his own container.

– On January 7, a 222kg bluefin tuna was sold for the highest price ever of 155 million yen at the Tsukiji fish market, Tokyo. That’s three times the record of last year.

References

– the quote and image of formula

-Tuna sites: Facts and Details, FAO, Globefish

– pictures from Wiki Commons

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4 thoughts on “Tuna Economics

  1. Couldn’t one of the other reasons for a greater price elasticity in Kansai than in Tokyo be the fact that generally there might be more lower income homes in Kansai than in Tokyo?

    • I didn’t research on that, so I’m not sure. But in that case, people in Kansai are lucky to prefer less greasy tuna, because that’s a lot cheaper than fat toro. (I suppose the cultural preference was developed before income differences emerged).

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