The collapse of the Japanese asset price bubble brought a phenomenon called the great price fall, with reimporters and discount chains bringing down inflated prices for food and consumer goods, especially electronics. Today, Tokyo is still one of the most expensive cities in the world, but the difference in living expenses between Japan and other industrialized nations is nowhere near the level of the 1980s.
Living standards improved sharply in the 1970s and 1980s, and real household expenditures did rise during Japan's economic growth. The share of total family living expenses devoted to food dropped from 35% in 1970 to 27% in 1986, while net household savings, which averaged slightly over 20% in the mid-1970s, averaged between 15 and 20% in the 1980s. Japanese households thus had greater disposable income to pay for improved housing and other consumer items. The increase in disposable income partly explained the economic boom of the 1980s, which was pushed by explosive domestic demand, as well as a sharp rise in the value of the YEN after the Plaza Accord.
Japanese income distribution in the 1980s, both before and after taxes, was among the most equitable in the world. An important factor in income distribution is that the lower income group is better off than in most industrialized countries. The economic crisis of the 1990s diluted this picture somewhat, increasing the unemployment rate (to 4.0% in 2006).
The need for heating depends on the geographic location. Northern and central Japan can experience several meters of snow during the winter, while southern Japan hardly experiences freezing temperatures (but can get extremely uncomfortable without air conditioning in the summer).
In the metropolitan areas, houses are built extremely close to each other, with narrow straps of green doubling for a garden, if any. Apartment buildings with ten to twenty floors can be found even in suburbs. While lacking space, these houses offer all other amenities.
The cost of Japanese housing differs greatly between urban and rural areas. The asset price bubble of the 1980s inflated land prices in the metropolitan areas, but have stabilized since the early 1990s at about 50% of the peak. In the cities, housing is still expensive relative to annual income, even though the high cost is somewhat offset by low interest rates. Large companies often offer subsidies to their employees to pay for housing.
See also: Housing in Japan
The Japanese diet has improved along with other living standards. Average intake per day was 2,084 calories and 77.9 grams of protein in the late 1980s. Of total protein intake, 26.5% came from cereals (including 18.4% from rice), 9.6% from pulses, 23.1% from fish, 14.8% from livestock products, 11% from eggs and milk, and 15% from other sources. Before World War II, the average annual consumption of rice was 140 kilograms per capita, but it fell to 72 kilograms in 1987. This development further exacerbated the problem of rice oversupply, leading to a huge rice stock and creating great deficits in the government's foodstuff control account. The government inaugurated several policies to switch to non-rice crops, but they met with limited success and rice remained in oversupply (see Agriculture, forestry, and fishing in Japan). As a downside, the percentage of the childhood population which are overweight has increased.
A negative aspect of Japan's economic growth is industrial pollution. Until the mid-1970s, both public and private sectors pursued economic growth with such single-mindedness that prosperity was accompanied by severe degradation of both the environment and the quality of life (see Environmental protection in Japan).
But many families in the 1980s were giving up the idea of ever buying a house. This led many young Japanese to spend part of their savings on trips abroad, expensive consumer items, and other luxuries. As one young worker put it, "If I can never buy a house, at least I can use my money to enjoy life now." As credit card and finance agency facilities expanded, the use of credit to procure other consumer durables was spreading. By 1989, the number of credit cards issued in Japan reache
Japanese families still feel that saving for retirement is critical because of the relative inadequacy of official social security and private pension plans. The average family in 1989 had US$76,500 in savings, a figure far short of what was needed to cover the living expenses for retired individuals, although official pensions and retirement allowances did help cover the financial burdens of senior citizens. The annual living expenses for retired individuals in 1989 were estimated at US$22,800. About half of this was from government pensions and the rest from savings and retirement allowances. Senior citizens in their seventies had the largest savings, including deposits, insurance, and negotiable securities worth an estimated US$113,000 per person. In 1989, individuals in their twenties had savings amounting to US$23,800 and salaried workers in their thirties had US$66,000 in savings.