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

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.

Positional spending and status seeking in rural China

“…The other interaction results in Table 5 for the poor are incompatible with herding behavior, suggesting that funeral spending is indeed positional and that the poor feel the greatest pressure to compete. These results are consistent with evidence showing that the poor spending up to several year's income to bury an important member in South Africa (Case et al, 2008) and Ghana (Economist, 2007).…”

“…For example, Case et al (2008) observe that South African households spend the equivalent of one year's income to bury deceased household members while The Economist (2007) reports on "splendid" funerals in Ghana, where the typical burial costs between $2000 and $3500 despite 79% of the population living on less than $2 per day; in each case, lavish spending is intended to indicate the social status of the deceased and the "quality" of the mourning family. In a similar fashion, Anderson (2007) provides evidence that high bride prices and dowries are used to attract socially desirable marital partners for one's children.…”

Conspicuous consumption and income inequality in an emerging economy: evidence from India

“…These studies have demonstrated significant conspicuous spending among the lowincome and racial minorities (e.g., Charles et al 2009;Harriger 2010) in developed countries as well as among the poor in developing countries (Banerjee and Duflo 2011;Anderson 2003;Case et al 2013;Guillen-Royo 2011;Jin et al 2011;Linssen et al 2011). Recent evidence from South Asia corroborates the same.…”

“…Despite the theoretical attention it has received, much of the empirical work examining the relationship between income inequality and conspicuous consumption has focused on developed economies (e.g., Charles et al 2009;Harriger 2010), with some notable exceptions (e.g., Case et al 2013;Fafchamps and Shilpi 2008;GuillenRoyo 2011). We extend this literature by examining the impact of state-level income inequality on conspicuous consumption behavior at the household level in India, an emerging economy, using data from the 2005 India Human Development Survey (IHDS).…”

Business and Climate Change Governance

“…For example, Bähre (2007) found that groups of Xhosa migrants in Cape Town relied on burial societies to ensure 'proper' burial in their homeland in the Eastern Cape (Bähre, 2007). A 'proper' burial is typically associated with following precise customs of individual communities, including entertaining friends and family attending the funeral for as long as they choose to stay and assisting the family of the deceased (Case et al, 2008;Roth, 1999), and it marks the strength of ties between the deceased person's family and the surrounding community. While formal insurance products pursue profit above all else (Collair, 1992), burial societies integrate cultural and religious values into their structure (Kritzinger, 1996).…”