No 2011-16, CSAE Working Paper Series from Centre for the Study of African Economies, University of Oxford
Funeral insurance has existed at least since antiquity, and it remains popular in many parts of Africa today. Yet the study of funeral insurance as a distinct form of insurance has hitherto been neglected. This paper presents a model in which funeral insurance combines regular life insurance with a restriction on how the payout is spent. The model predicts that there is an intermediate range of income and wealth where funeral insurance is demanded. The prediction is tested on a nationally representative sample of black South African households, a setting where both life and funeral insurance are widely available. The model also gives conditions under which funeral insurance is not demanded at any level of income and wealth. This may explain why funeral insurance is less popular in developed countries, even among the relatively poor.
JEL-codes: D81 G22 O12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-afr, nep-cis, nep-ias and nep-mfd
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Persistent link: https://EconPapers.repec.org/RePEc:csa:wpaper:2011-16
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