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Ban on Joint Ownership of Funeral Homes and Cemeteries Will Cost Wisconsin Families $15.5 Million

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Almost 40 Other States Allow Joint Ownership of Funeral Homes and Cemeteries, Why Not Wisconsin?

August 19, 2013

Wisconsin strictly prohibits the joint ownership of funeral homes and cemeteries. The MacIver Institute, in conjunction with David E. Harrington, the Himmelright Professor of Economics at Kenyon College and Jaret Treber, an associate professor of economics at Kenyon College, has determined that this unneeded prohibition will cost families in the Badger State at least $15.5 million over the next ten years.

Wisconsin's law, first adopted over 70 years ago, says, "No cemetery [may] permit a funeral establishment to be located [there]," nor have a "financial interest" in one.

Last session, Rep. Evan Wynn introduced legislation to repeal the prohibition on joint ownership. During this debate, another legislator said that better empirical evidence was needed.

This report presents the empirical evidence that shows Wisconsinites would realize significant savings, anywhere from $15.5 million to $27.6 million over the next ten years, if state government would let the free market work.

While Wisconsin is one of only two states that strictly prohibit combination ("combo") funeral homes and cemeteries, there are nine other states and the District of Columbia that have some type of regulation on joint ownership. The repeal of this burdensome law would expand the market and open it to new businesses.

By opening the market to more businesses, it would create greater competition within the industry. This competition would give consumers more choice, therefore driving prices down. The report shows Wisconsin families would save at least $15.5 million in 10 years, and $26.4 million in 20 years*.

 

According to Harrington and Treber, "there are substantial savings from having a funeral handled by a combo rather than a stand-alone: our estimates range from $492 to $880. These estimates equal the difference in cost-to-revenue ratios between combos and stand-alones multiplied by the average funeral expenditures at stand-alone funeral homes."

It is these lower costs that give combos an economic advantage over stand-alone funeral homes, providing for more competition. Due to increased efficiency (Filling out paperwork once instead of twice, purchasing a burial plot at the same time the visitation is planned, etc.), combos can drive down the the market price and save consumers money.

Read the rest of the report by clicking the link below.

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