Working Paper: NBER ID: w14456
Authors: Anne Case; Anu Garrib; Alicia Menendez; Analía Olgiati
Abstract: We analyze funeral arrangements following the deaths of 3,751 people who died between January 2003 and December 2005 in the Africa Centre Demographic Surveillance Area. We find that, on average, households spend the equivalent of a year's income for an adult's funeral, measured at median per capita African (Black) income. Approximately one-quarter of all individuals had some form of insurance, which helped surviving household members defray some fraction of funeral expenses. However, an equal fraction of households borrowed money to pay for the funeral. We develop a model, consistent with ethnographic work in this area, in which households respond to social pressure to bury their dead in a style consistent with the observed social status of the household and that of the deceased. Households that cannot afford a funeral commensurate with social expectations must borrow money to pay for the funeral. The model leads to empirical tests, and we find results consistent with our model of household decision-making.
Keywords: Funeral Costs; Household Decision-Making; Social Norms; AIDS Crisis
JEL Codes: D12; O12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Income (D31) | Funeral Costs (J17) |
| Social Pressure (C92) | Funeral Spending (D14) |
| Household Socioeconomic Status (D19) | Borrowing Likelihood (G51) |
| Lower Individual Status (D31) | Reduced Spending (H69) |
| Lower Household Income (D19) | Increased Probability of Borrowing (G51) |
| Household Assets (D14) | Higher Spending (H59) |
| Cause of Death (AIDS) (I12) | Funeral Costs (J17) |
| Cause of Death (AIDS) (I12) | Borrowing Probability (G51) |
| Social Expectations (D84) | Borrowing for Funerals (G51) |
| Borrowing (G51) | Funeral Spending (D14) |