The Irrationality Behind Funerals

The funeral industry generates roughly 16 billion dollars of revenue in the U.S. Over the past decade, dying has become more expensive, with the average funeral costing around $9,000. More people are choosing to cremate or have a small service with less expensive caskets and burials. An entirely rational person would try to maximize value while minimizing expenses, but a rational decision-making process, especially regarding grieving the loss of a loved one, becomes quite difficult especially due to the environment of funerals.

It becomes easy for funeral homes to take advantage of the emotional vulnerability families are in when planning memorial services. Funeral homes can take advantage of the idea of guilt aversion; a tendency to avoid decisions that negatively impact others even if it means sacrificing some of one’s own gain. When a loved one passes away, people want to honor them in the best way possible and therefore become more susceptible to selling tactics or others’ opinions. Oftentimes, funeral homes will try and push families to choose more expensive options that may not be necessary.

Funeral planning is also quite complex as there are lots of decisions to be made in a short amount of time. These decisions can become overwhelming, and some funeral homes will try and give lots of options for families to choose from so that they might make more expensive choices. This could be explained using the idea of menu dependence and the decoy effect; a collection of goods is ranked in order of preferences and the addition of another preference changes the original order of goods. This is an irrational idea as the presence of options leads to inconsistencies in decision-making. Funeral homes have lots of casket options, for example, which aren’t that different in appearance. Someone might choose a casket that wouldn’t give them the best utility because of all the options altering their decision-making.

There is a social stigma around trying to honor loved ones in the best way one can by having extravagant services. Because people are so easily influenced during the time surrounding the service, they tend to spend more than they can actually afford or plan a service that wasn’t wished for by the one who passed away. There are so many decisions to be made and families aren’t often in the best head spaces which all influences the degree to which they are rational, making a difficult time even harder and more impactful than it needs to be.

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