Paying the Piper: The High Cost of Funerals in South Africa

Anne Case (), Anu Garrib, Alicia Menendez and Analia Olgiati

No 14456, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: D12 O12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-afr and nep-dev
Date: Written
Note: AG
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