Friday, May 1, 2009

Cremation or Burial?

Recently CNN wrote a short article on the impact the recession has on the funeral business. The main point of the article is that the recession is affecting all businesses - even the funeral business. How? It is not as if when a loved one passes that people are choosing not to respectfully take care of their loved one's remains, but families are responding to the relative prices of cremation and burial. The article states that burial is about 10 times more expensive than cremation, and the demand for cremation is up over 10% this year. If consumers view two goods as being highly substitutable - such as cremation and burial then a decline in income can result in an increase in quantity demanded - as we have seen with cremation. Economically this means that cremation is an inferior good, and burial is a normal good (i.e. a decline in income leads to a decline in quantity demanded).

OK, this has been a rather somber post for a Friday, so I leave you with what Jerry Seinfeld has to say about the decision as to be buried or cremated at death:
Cremation has become the most popular form of burial in the United States… People used to want a big, thick granite stone, their names carved into with a chisel. “I was here dammit!” Cremation is like you’re trying to cover up a crime. “Burn the body. Scatter the ashes around. As far as anyone’s concerned this whole thing never happened.”

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