An Intercountry Study of Students’ Spending Patterns and Financing: Okinawa and Akita Students’ Lifestyles

ABSTRACT - Young people’s bankruptcy problems are becoming a major social issue in Japan. The purpose of this study is to examine the state of Japanese students’ feelings concerning money (as compared to U.S. students), and to investigate their spending patterns and financing. These findings may be applied to the development of consumer education curricula directed to younger people.



Citation:

Rieko Hanashiro and Seiko Sawai (1998) ,"An Intercountry Study of Students’ Spending Patterns and Financing: Okinawa and Akita Students’ Lifestyles", in E - European Advances in Consumer Research Volume 3, eds. Basil G. Englis and Anna Olofsson, Provo, UT : Association for Consumer Research, Pages: 179-184.

European Advances in Consumer Research Volume 3, 1998      Pages 179-184

AN INTERCOUNTRY STUDY OF STUDENTS’ SPENDING PATTERNS AND FINANCING: OKINAWA AND AKITA STUDENTS’ LIFESTYLES

Rieko Hanashiro, University of the Ryukyus, Japan

Seiko Sawai, Akita University, Japan

ABSTRACT -

Young people’s bankruptcy problems are becoming a major social issue in Japan. The purpose of this study is to examine the state of Japanese students’ feelings concerning money (as compared to U.S. students), and to investigate their spending patterns and financing. These findings may be applied to the development of consumer education curricula directed to younger people.

BACKGROUND AND PURPOSE

The Japan Consumer Information Center (1996, pp. 28-57) reported that frauds targeting the young market, such as tel-marketing scams, appointment-sales and pyramid schemes are increasing these days. For example, 268,801 consumers claiming for fraud in 1995 were asked to give their advice to consumer centers in Japan and 31.5% of these claims were found to be from people in their twenties. This supports the claim that young people’s bankruptcy problems are recently becoming a major social issue in Japan.

In contrast, Japanese consumer credit loan companies have recorded their highest profits in recent years. The major cause attributing to this is the "automatic contract machine" which charges high interest rates of around 30%. When people want to loan money from a credit loan company, there are two ways to do this. The first way is to enter the shop and ask the clerk for. The second way is to enter an automatic contract machine booth (resembling an ordinary bank ATM) and complete the personal information required. If the customer is not blacklisted by the credit information center, i.e., they have no more than three company loans at once, then they can loan US$4,424 within 30 minutes.

The first automatic contract machine was introduced to the Tokyo area in 1994. After that initial success the number of machines increased quickly, totaling 3,035 throughout Japan in 1996. In Okinawa, only 24 machines existed in February 1996, but this increased threefold to 74 machines in April 1997. The people most likely to use the automatic contract machines are younger people in their twenties who do not hesitate to deal with computers (Credit Age, 1997, pp. 5-9).

Thus, although Japan has traditionally been "cash society", it is now changing into a "credit society" because of the habits of younger people. Because of such economic and societal changes, the Ministry of Education revised the Japan educational policy in 1989. For example, consumer education fields started to be taught in home economic education as compulsory co-education subjects in junior high in 1993 and in senior high in 1994. Indeed, because money is usually an essential means to live in contemporary society, consumer education should be a kind of passport for younger people to live, especially in affluent developed societies like the U.S. and Japan.

While attending university, students are usually in a financial transition period from their parents and need guidance in money matters. Although Japanese students are not usually financially independent, it is said that they are "generations who do not know to be patient". It is usual for Japanese children to grow up surrounded by a lot of material things, therefore, as students, they are not reluctant to buy expensive brand goods or to borrow money for those expensive goods.

Thus, the purpose of this study is to examine the state of Japanese students’ feelings concerning money (in comparison to U.S. students), and to investigate their spending patterns and financing. These findings may then be used for the future development of consumer education curricula for younger people.

METHODS AND PROCEDURE

Data for this comparative study is from the 1996 "Students’ Lifestyle Research" survey (Appendix 1), which was designed by the authors to test three hypotheses: (1) that even within the same country, prefectures such as Akita and Okinawa may have different values because of factors including geographic position, distance apart and culture(indeed, it is known that Okinawa has a unique culture which is a mix of Chinese and Japanese culture), (2) that Japanese traditional savings-oriented values are stronger than those in the U.S. and (3) that Japanese students depend more upon their parents for financial assistance than U.S. students.

To test these hypotheses, students of three universities were surveyed: (1) University of Hawaii in the U.S., (2) Akita University, northern Japan and (3) University of the Ryukyus, southern most Japan. Participants who were surveyed in this study included 98 students from Akita, 75 students from Okinawa and 49 students from the initial Hawaiian survey. All surveyed students were enrolled in the Department of Home Economics education.

This pilot study research measures both student values concerning money and the degree of dependence on their parents. To achieve this, students were posed 20 survey questions concerning their feelings about money. Then students were asked to estimate the payment they contributed for 15 items to determine the degree of dependence on their parents.

SAMPLE

Akita is located in northern Japan. Its average yearly temperature is 11.1 HC, and its population is 1214 thousand. In contrast, Okinawa is located in the southern most part of Japan. Its average yearly temperature is 22.4HC, and its population is 1274 thousand, almost the same as Akita’s. There is only one national university in each prefecture, i.e., Akita University in Akita and University of the Ryukyus in Okinawa. Table 1 gives an overview of the demographic characteristics of the sample. The Japanese students are all single, predominantly female, and under 23 years old. The number of students are evenly divided between those living at home and away from home in both areas.

It was also found that 65% of Akita students (i.e., 64 out of 98 students surveyed) and 76% of Okinawa students (i.e., 46 out of 75 students surveyed) have part-time jobs. For the working students, over half in both areas are employed in professional/technical positions, such as tutoring. Since all Japanese students belong to colleges of education, they are highly motivated to teach. Additionally, the average pay per hour for private school, "Juku" teachers or tutoring is two times that of other part-time jobs. Private tutoring or "juku" teaching is very demanding and shapes the educational industry.

According to the 1994 national survey of the Ministry of education (1997, pp. 26-28), 24.5% of elementary school children’s parents, 39.0% of junior high children’s parents and 26.4% of senior high children’s parents pay for private tutoring or mail order educational materials. And 40.6% of elementary school children’s parents, 77.4% of junior high children’s parents and 43.7% of senior high children’s parents paid for "Juku". This indicates that Japan’s educational industry is supported by college students working part time in such positions as tutoring or "Juku" teaching. Thus, Japanese education costs include expenses for college education, but also for extra curricular activities and education.

TABLE 1

DEMOGRAPHIC CHARACTERISTICS OF SAMPLE

TABLE 2

VALUES CONCERNING MONEY

RESULTS AND DISCUSSION

Our survey disproved our first hypothesis that different prefectures within Japan have different values. For example, from the 20 survey questions assessing students’ feelings about money (Appendix 1, Part A), only one significant difference (question 13) was shown between Akita and Okinawa (See Table 2).

Indeed, significantly more Okinawan students agreed with question 13, assessing whether "people gather around rich" than Akita students who tended to only sometimes agree with this.

Although Okinawa’s yearly income is the lowest in Japan, its family ties are very strong and there are lots of regular annual events to meet with relatives. However, the host often spends much money on these events, which perhaps attributes to the Okinawan students’ opinion that "people gather around rich". Therefore a regional background seems to have influenced this result. However, the survey showed that other values concerning money are likely to be similar between prefectures. In contrast, seven opinions out of 20 survey questions had a significant difference between Japan and the U.S.

Before we discuss our second hypothesis, it is important to understand some Japanese values. For example, in Japan, it is considered that spending money within ones means is an important attitude to maintain a secure personal life. This is especially the case in today’s economic climate in which debt by credit card is becoming prevalent. Also, "Execute saving" had been an important national slogan before world war II. Indeed, this slogan continued to influence the Japanese saving-oriented attitude even after Word War II, and is reflected in Japan’s high national saving rate.

This survey also dispoved our second hypothesis that Japanese traditional saving-oriented values still remain in younger people. Younger people are now tending to spend more than they save (which is opposite the national trend). For example, regarding questions 3, 7 and 19 (Appendix 1, Part A), the findings were opposite to those which we predicted. Question 3 and 7 showed significant differences between the U.S. and Japan. The U.S. students, not the Japanese, were found to be more likely to agree with the saving-oriented values of questions 3 and 7.

Okabayashi (1996, p. 155) states that "although Japanese students value had been kept the preference of ascetic life in the 1950s, it gradually changed their preference in favor of individualism and flexible attitude from the 1950s to the 80s. And from the 1980s to the 90s, while the importance of moral and religion norms, which is necessary to maintain a social group has been deteriorating, the trend toward individualism has been growing more and more obvious, and values beyond the individual interest have lost ground". Although the value which is researched in our study is not directly concerned with Okabayashi’s (1996) social value, the ascetic, planned and steady aspects concerning money seem to be deteriorating in Japan.

Table 3 shows the degree of student’s dependence to their parents. Comparing Akita with Okinawa, only 2 factors were significantly different in the chi square statistics, i.e., books in new semester and car (Appendix 1, Part B, questions 2 and 8). Okinawan students were found to be more dependent on their parents regarding purchasing a car than Akita’s students. This could be attributed to the idea that Okinawa is the only prefecture which does not have a railway in Japan. Indeed, a car is essential for almost all students from the beginning of college life, often when they do not have enough money to buy it.

However, comparing Japanese students and U.S. students, 13 items out of 15 items had a significant difference (only questions 13 and 15 had no significant difference, i.e., "house after marriage" and parents living cost") (Appendix 1, Part B). Finally, this survey proved our third hypothesis that Japanese students depend more upon their parents for financial assistance than U.S. students (see Table 3). Japanese students are more likely to be dependent upon their parents financially even for cheap things like music tape or clothing (Appendix 1, Part B, questions 3 and 10). Such a dependence for a wide range of daily necessities, is commonly accepted by Japanese parents.

The Japanese value system expects education to be a responsibility of all parents. A national survey (The Economic Plan Agency 1994, p.26) found that 58.2% of Japanese parents think that they should pay the whole cost of college education, and 34.2% think the students’ whole living cost should be also paid by the parents. And actually, according to the 1994 national survey which was done by the Ministry of Education, living costs of national university students who live with their parents was US$9971 a year and 58% of this, or US$5782 was from their parents. For those national university students not living with their parents, US$12023 a year or 75% of living costs was paid by their parents (The Bank of Japan 1997, p.76). Such a tendency, that parents have a responsibility about their children’s college education, (not only in the tuition but also in the living cost), is reflected in the results of this study. Because education costs rest heavily on parents they must be financially prepared.

In 1995, the saving rate of Japanese households was 13.1% (Bank of Japan 1997, pp.2-3), indeed, saving rates had been over 10% in Japan ever since the end of world war II. In 1996, the average amount of saving per household was US$115,132 (Bank of Japan 1997, p.7), the reasons for which are discussed by another Bank of Japan publication (Japan Bank 1996, p.14). This found the most common reason to save (at 65.7%) to be for unexpected disaster and the deceased. The second most common reason (at 53.9%) was for retirement, and the third (at 33.1%) was for child’s education. These reslts represent the source of uneasiness, the insufficiency of social security in Japan and that education becomes one reason of saving.

However, regardless of parents expectations to education, a question about the profitable investment of education is apparent these days. Indeed, the White Paper on the National Lifestyle Fiscal Year (1996) referred to the investment effect of education. It calculated the average total Japanese lifetime income and costs of education. The return on investment was taken as the percentage by which the total for university graduates exceeded that for high school graduates. This percentage was 11.1% for individuals born in 1935, 8.1% for those born in 1950, and 9.0% for those born in 1965.(The Economic Planning Agency 1997, p.30). Although the percentage is declining these days, whether it is profitable for students to take college education or not depends upon the individual.

In addition to the situation that parents don’t hesitate to pay for education, the student’s financial situation that they can not work when they are high school students is related with the results of this study. Generally, Japanese high school students are prohibited to get a part time job by their school. Actually, most students who want to go college do not have time to work part time, since competition or "entrance war" is very keen. Indeed, the possibility of students passing college entrance examinations will be decreased when they have a part time job. Therefore, when Japanese students start their college life, they do not have enough money to pay tuition and to prepare for a new life. Because of this reason, the expensive things like furniture, TV, refrigerator, and washing machine are paid for by their parents, and are usually purchased new. This result may partly stem from the fact that the second-hand market, such as garage sales and second-hand stores, is not developed in Japan.

CONCLUSION

From our survey, the following conclusions were gained:

1) Over half of Japanese students do part-time tutoring or are "Juku" teachers. Japan’s educational industry is supported by such college students working part time. This study also points out that Japanese education costs include expenses for college education, but also for extra-curricula activities and education.

2) From the results of Part A of the survey which investigated students feelings concerning money, a regional difference within Japan was not found, except for one opinion.

3) The U.S. students are more likely to agree with the saving-oriented values than Japanese students. The ascetic, planned and steady aspects concerning money also seems to be deteriorating in Japanese students.

4) When comparing the U.S. and Japanese students, more Japanese financially depend on their parents for everything from cheaper daily expenses to tuition fees. This is expected in the Japanese culture where parents have a whole responsibility to give an education to their child.

5) Since Japanese high school students are prohibited to work, they do not have enough money to start new college life. Therefore, they must depend upon their parents for financial support.

TABLE 3

WHO PAYS FOR:

APPENDIX 1

PART A-1996 STUDENTS' LIFESTYLE SURVEY

REFERENCES

Bank of Japan (1997), Statistics concerning living and saving Government Printing Office.

Bank of Japan (1996), Public Opinion Survey about Saving and Spending 1996 Government Printing Office.

Japan Consumer Finance Association (1997), "The state of introduction of automatic contract machine" Credit Age vol. 209 (5 May): 4-11.

Japan Consumer Information Center (1996), "Consumer affairs: Annual report 1996" Japan Consumer Information Center.

Okabayashi (1996), "Diachronic Changes of College Students" Value Orientation and Educational Environment Educational Studies, International Christian University 38:109-155.

The Economic Planning Agency (1996), "White Paper on the National Lifestyle Fiscal Year 1996" Government Printing Office.

The Economic Planning Agency (1994), The consciousness and state concerning family and society Government Printing Office.

The Ministry of Education (1994), Children’s educational cost fiscal year 1994 Government Printing Office.

----------------------------------------

Authors

Rieko Hanashiro, University of the Ryukyus, Japan
Seiko Sawai, Akita University, Japan



Volume

E - European Advances in Consumer Research Volume 3 | 1998



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