AbstractFuneral 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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Centre for the Study of African Economies, University of Oxford in its series CSAE Working Paper Series with number 2011-16.
Date of creation: 2011
Date of revision:
Other versions of this item:
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
This paper has been announced in the following NEP Reports:
- NEP-AFR-2011-10-22 (Africa)
- NEP-ALL-2011-10-22 (All new papers)
- NEP-CIS-2011-10-22 (Confederation of Independent States)
- NEP-IAS-2011-10-22 (Insurance Economics)
- NEP-MFD-2011-10-22 (Microfinance)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Stephen P. King, 2000. "Introduction," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 33(1), pages 65-66.
- Levenson, Alec R. & Besley, Timothy, 1996. "The anatomy of an informal financial market: Rosca participation in Taiwan," Journal of Development Economics, Elsevier, vol. 51(1), pages 45-68, October.
- J. Bryant & A. Prohmmo, 2002. "Equal Contributions and Unequal Risks in a North-east Thai Village Funeral Society," Journal of Development Studies, Taylor & Francis Journals, vol. 38(3), pages 63-75.
- Nava Ashraf & Dean S. Karlan & Wesley Yin, 2005.
"Tying Odysseus to the Mast: Evidence from a Commitment Savings Product in the Philippines,"
917, Economic Growth Center, Yale University.
- Nava Ashraf & Dean Karlan & Wesley Yin, 2006. "Tying Odysseus to the Mast: Evidence from a Commitment Savings Product in the Philippines," The Quarterly Journal of Economics, MIT Press, vol. 121(2), pages 635-672, May.
- Nava Ashaf & Dean Karlan & Wesley Yin, 2004. "Tying odysseus to the mast: Evidence from a commitment savings product in the philippines," Natural Field Experiments 00206, The Field Experiments Website.
- Marcel Fafchamps & Susan Lund, 2000.
"Risk-Sharing Networks in Rural Philippines,"
Economics Series Working Papers
10, University of Oxford, Department of Economics.
- Stefan Dercon & Tessa Bold & Joachim De Weerdt & Alula Pankhurst, 2004.
"Group-based Funeral Insurance in Ethiopia and Tanzania,"
CSAE Working Paper Series
2004-27, Centre for the Study of African Economies, University of Oxford.
- Dercon, Stefan & De Weerdt, Joachim & Bold, Tessa & Pankhurst, Alula, 2006. "Group-based funeral insurance in Ethiopia and Tanzania," World Development, Elsevier, vol. 34(4), pages 685-703, April.
- Stefan Dercon & Tessa Bold, 2004. "Group-based Funeral Insurance in Ethiopia and Tanzania," Economics Series Working Papers WPS/2004-27, University of Oxford, Department of Economics.
- Johnson, Paul A, 1985. "The Economics of Old Age in Britain: A Long-Run View, 1881-1981," CEPR Discussion Papers 47, C.E.P.R. Discussion Papers.
- Lewis, Frank D, 1989. "Dependents and the Demand for Life Insurance," American Economic Review, American Economic Association, vol. 79(3), pages 452-67, June.
- Bloch, Francis & Genicot, Garance & Ray, Debraj, 2008.
"Informal insurance in social networks,"
Journal of Economic Theory,
Elsevier, vol. 143(1), pages 36-58, November.
- Francis Bloch (GREQAM and Universite de la Mediterranee), Garance Genicot (Georgetown University, and Debraj Ray (New York University and Instituto de Analisis Economico (CSIC)), 2004. "Informal Insurance in Social Networks," Working Papers gueconwpa~04-04-16, Georgetown University, Department of Economics.
- Francis Bloch & Garance Genicot, 2005. "Informal Insurance in Social Networks," 2005 Meeting Papers 156, Society for Economic Dynamics.
- Bernheim, B Douglas, 1991.
"How Strong Are Bequest Motives? Evidence Based on Estimates of the Demand for Life Insurance and Annuities,"
Journal of Political Economy,
University of Chicago Press, vol. 99(5), pages 899-927, October.
- B. Douglas Bernheim, 1992. "How Strong are Bequest Motives? Evidence Based on Estimates of the Demand for Life Insurance and Annuities," NBER Working Papers 2942, National Bureau of Economic Research, Inc.
- Ethan Ligon & Jonathan P. Thomas & Tim Worrall, 2002.
"Informal Insurance Arrangements with Limited Commitment: Theory and Evidence from Village Economies,"
Review of Economic Studies,
Oxford University Press, vol. 69(1), pages 209-244.
- Ligon, Ethan & Thomas, Jonathan P & Worrall, Tim, 2002. "Informal Insurance Arrangements with Limited Commitment: Theory and Evidence from Village Economies," Review of Economic Studies, Wiley Blackwell, vol. 69(1), pages 209-44, January.
- Arnott, Richard & Stiglitz, Joseph E, 1991. "Moral Hazard and Nonmarket Institutions: Dysfunctional Crowding Out or Peer Monitoring?," American Economic Review, American Economic Association, vol. 81(1), pages 179-90, March.
- Timothy Besley, 1995. "Nonmarket Institutions for Credit and Risk Sharing in Low-Income Countries," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 115-127, Summer.
- Cally Ardington & Murray Leibbrandt, 2004. "Financial Services and the Informal Economy," SALDRU/CSSR Working Papers 066, Southern Africa Labour and Development Research Unit, University of Cape Town.
- Mathias Dewatripont & Lars Peter Hansen & Stephen Turnovsky, 2003. "Advances in economics and econometrics: the eighth world congress," ULB Institutional Repository 2013/9557, ULB -- Universite Libre de Bruxelles.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Why is funeral insurance so popular in Africa?
by Economic Logician in Economic Logic on 2011-11-08 16:41:00
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Richard Payne).
If references are entirely missing, you can add them using this form.