Sep 27, 2013

The Cost of Funerals in South Africa

We analyze funeral arrangements after 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.
From a paper by Anne Case, Anu Garrib, Alicia Menendez, & Analia Olgiati. A draft is here
The social norms  
It would be difficult to exaggerate the importance of funerals in South African life. Funerals serve to honor the dead, who are entering a new life as ‘ancestors.’ In addition, funerals mark the deceased’s status (and that of his family) within the community. They also strengthen ties with neighbors and extended family, who may travel long distances to attend the funeral. More than any other single rite of passage – births, graduations, marriages – funerals provide a focal point for family and community life. (See Roth 1999 for discussion.) (p. 5)
For some or all of these reasons, funerals are elaborate, and expensive. In addition to expenses for a coffin, traditional burial blankets, and (often) a tent for the funeral, immediate family must pay to entertain mourners. After a death, extended household members may arrive for a lengthy visit. It is expected that the immediate family of the deceased will feed mourners who have come for the funeral, for as long as they choose to stay. In addition, animals are slaughtered to honor the dead. Precise customs vary from place to place, but in KwaZulu-Natal, when an adult male dies, general custom is to kill a cow, and to use its meat to feed all present. This is an expensive proposition: cattle during this period sold for approximately 2000 Rand a head.3 With median per capita income among Africans (Blacks) approximately 400 Rand a month, the cow represents more than a third of a year’s income for half the African population. When an adult female dies, a goat is slaughtered. While less expensive than a cow, this is still a considerable expense for the household (p. 5).
Great read for a class on culture and economics (or finance).

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