Monday, January 11, 2021
We find that state mandated facility requirements may constrain the size and location of funeral homes. Many states have funeral regulations that require funeral homes to have embalming rooms, chapels, and casket display rooms. Often these facilities go unused, providing no discernible benefit to consumers while imposing unnecessary costs on firms. Using a case study, we present evidence that Arizona's more extensive facility requirements reduce the number of small funeral homes relative to Florida and prevent them from locating in shopping centers. We estimate that eliminating Arizona's cumbersome facility requirements would save consumers approximately 14% on their funeral expenditures.