A train passes on an overhead section in Tokyo’s Chiyoda Ward on Jan. 29, 2023. (Mainichi)
TOKYO — Although rail operators in Japan have been announcing price hikes, fares remain low compared to other major economies — whether compared by foreign exchange rate or how many McDonalds’ Big Macs you can buy for the same price, a Tokyo-based think tank’s recent study has found.
Deputy chief researcher Makiyo Kanaya of the Institute of Transportation Economics, based in Tokyo’s Shinjuku Ward, looked at rail fares in the Group of Seven (G7) countries. The survey compared regular fares for 16- to 20-kilometer sections of urban railways (excluding subways) in large cities in the United States, the United Kingdom, Canada, Germany, France and Italy against the roughly 18-km trip between JR Tokyo and JR Kawasaki stations.
Comparing prices using market exchange rates in which one dollar equaled 150 yen, the most expensive trip was 1,693 yen in the U.S. The next highest was in the U.K. at 1,296 yen, followed by Germany at 765 yen, Canada at 670 yen, France at 407 yen and Italy at 342 yen. Japan followed all of these at 320 yen.
Bear in mind, due to fluctuations of exchange rates and the fact that Japan’s prices are not considered cheap on a global level, a sweeping comparison isn’t possible. For that reason, Kanaya tested using the “Big Mac Index” to adjust for differences in price standards and compare things in a way that comes close to showing the real standards of living in each country.
The index refers to using McDonalds’ ever-popular Big Mac as a basis for comparing prices in different countries without being affected by short-term fluctuations in exchange rates. The Big Mac is used because it is made with the same ingredients in all countries, and its price is relatively stable.
Using the Big Mac Index, it was calculated how many of the burgers could be bought for the price of taking the 16-20 km urban train trips. In Japan this was 0.67, which is again low compared to 1.98 for the U.S., 1.46 for the U.K., 0.84 for Germany, 0.81 for Canada, 0.45 for France and 0.38 for Italy.
Last December, East Japan Railway Co (JR East) applied to the transport ministry to raise fares next March. Although the cost of the Tokyo-Kawasaki trip covered in this study will rise by 30 yen, it will largely remain affordable according to the Big Mac Index versus other G7 countries.
Why is Japan able to keep commuter train fares low? Fares are based on and reflect things such as quality of rail infrastructure and service, government subsidies and policy differences.
Kanaya said one reason prices are cheaper in Japan is the number of riders. During commuting hours, trains in urban and suburban areas run every few minutes in Japan, compared to several times an hour in other countries. Because there are so many users, costs can be distributed among them, Kanaya mentioned.
Another major factor is the system in which prices cannot be hiked at rail companies’ sole discretion. Price revisions are subject to ministry approval, and those planned by JR East for next year will be the first, aside from the imposition of sales and other tax hikes, since the operator’s establishment in 1987.
JR East said the price hikes are “to sustainably operate in circumstances where it is difficult to secure stable funds for capital investment and repairs.” Kanaya added, “Given the level of fares, it is also important that users shoulder an appropriate burden.”
(Japanese original by Yuko Shimada, Business News Department)
AloJapan.com