August 5, 2002
The funeral industry is subject to a dense patchwork of state and federal regulations. Given that consumers spend over $13 billion per year on funerals, these regulations can have quite a hefty price tag. Many critics argue that these regulations deter cremation of the deceased.
Cremation is a cheaper alternative to burial that is growing in appeal:
- The funeral costs associated with cremation average $2,325, compared to $6,073 for burial.
- The cremation rate has risen from less than 4 percent in the mid-1960s to nearly 25 percent in the late 1990s.
However, crematoriums claim that regulations impose unnecessary burdens and favor burials. Researchers say there is some evidence of this charge. For example:
- In the late 19th century, many states required that all bodies be embalmed for public health reasons -- even those that were later cremated.
- Modern science cannot find any public health benefit from embalming, but many states still require funeral directors to be trained in embalming.
- These regulations reduce the number of cremations by 16 percent and cost Americans $252 million or 2.6 percent more per year on funerals.
On the other hand, the study found many regulations that boost the number of cremations. Each additional year of required training by funeral directors raises the cremation rate 1.8 percentage points. Moreover, requiring crematories to be located in cemeteries leads to higher cremation rates in regulated states.
Source: David E. Harrington and Kathy J. Krynski, "The Effect of State Funeral Regulations on Cremation Rates: Testing for Demand Inducement in Funeral Markets," Journal of Law and Economics, April 2002.
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