Impact of population decline on service availability in Japanese cities

Sompo Institute Plus, the think tank of the Sompo Group, has published a research report analyzing the relationship between population decline and the availability of various services (both private and public) in Japanese cities. It uses data on the number of stores and facilities per city to estimate "thresholds" at which service levels might decrease due to population loss.

The key finding is that different types of services have different thresholds. Ubiquitous services like convenience stores have a relatively low threshold, while services like hamburger chains and coffee chains require a certain population size to be viable.

The analysis suggests that population decline may lead to the disappearance of some services altogether, especially in smaller cities. The report emphasizes the need to understand these thresholds in order to anticipate changes in service availability.

Population Decline and Service Reduction

The report addresses concerns about the impact of population decline on service availability, noting that while population loss is occurring in both small (under 50,000 people) and medium-sized cities (100,000-150,000 people), the mechanisms and timing of service reduction may differ.

Small cities already face challenges in education, employment, and healthcare, leading to population outflow. Medium-sized cities are experiencing natural population decline, and the anticipation of further population loss may cause private companies to consolidate or withdraw, potentially leading to a decline in services and subsequent population outflow.

The report highlights a "turning point" in the relationship between population decline and service reduction, implying that service reduction may not be linear with population decline.

Service Analysis Methodology

The analysis calculates the "coverage area" or "trade area" of various services by dividing the population by the number of stores or facilities. This helps estimate the population needed to support a certain number of facilities. Services are categorized into two groups:

• Ubiquitous Services: These are services that are found in almost every city, regardless of size. Examples include convenience stores, clinics, and dental clinics.
• Services Requiring a Minimum Population Size: These are services that are less likely to be found in smaller cities. Examples include hamburger chains, coffee chains, hospitals, and high schools.

The study uses data from private company publications, the Ministry of Health, Labor and Welfare, the Ministry of Education, Culture, Sports, Science and Technology, and other publicly available sources. The study uses a cross-sectional data approach, not longitudinal data.

Thresholds for Service Reduction - Ubiquitous Services

• Convenience Stores: The average trade area is about 2,500 people per store. This suggests that a cumulative population loss of 2,500 people in a city could lead to the closure of one store. The document notes a low standard deviation (around 500) for convenience stores’ trade areas, which indicates the companies heavily consider trade area sizes when opening or closing stores.
• Clinics: About 1,000 people per clinic.
• Dental Clinics: About 2,000 people per clinic.
• Schools (Elementary & Junior High): Elementary schools serve approximately 5,000-6,000 people and junior high schools serve approximately 10,000+ people. The study notes that closures of these schools are likely to be somewhat mechanical based on student population declines.
• Post Offices: Average trade areas for post offices are about 3,000 people, although the study also notes the presence of some smaller regional postal offices.

Thresholds for Service Reduction - Services Requiring Minimum Population

• Hamburger Chains: The study found the probability of a hamburger chain existing is 50% at a city population of around 20,000 to 30,000.
• Coffee Chains: The study found the probability of a coffee chain existing is 50% at a city population of around 50,000.
• Hospitals & High Schools: Generally found in the vast majority of cities but are often limited to only 1-2 facilities in smaller cities (especially those with less than 20,000 residents).

Variability in Services

The study notes that while some services are ubiquitous, there is significant variability in the number of services per city as well as the trade areas. For example, while the standard deviation is low for convenience stores, it is much higher for some of the public services (such as elementary schools, secondary schools, and post offices).

The analysis implies that for public services, the facilities will still exist even with a low trade area, however that may strain existing resources.

Implications of Findings

• The study implies that population loss will not affect all services equally.
• As cities lose population, it becomes more likely that certain services will disappear entirely, not just become less accessible.
• The "thresholds" are a useful tool for anticipating potential service reduction or elimination.
• The report suggests that the thresholds presented are a useful benchmark, but do not guarantee a reduction of service if population falls below the respective thresholds. However, companies in the private sector are likely to make decisions based on these financial considerations.
• Understanding these "turning points" is critical to mitigating the negative consequences of population decline.

Conclusion

The research report highlights the complex relationship between population decline and service availability. The document provides a valuable framework for understanding and anticipating the potential impact of population loss in Japan's cities. The thresholds identified for various services offer a guide for policymakers, businesses, and community planners to proactively address the challenges of demographic change. Further investigation, specifically using longitudinal data, would help in validating these findings and making more accurate predictions.

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