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Constraining Competition With State Mandated Facility Requirements

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  • David E. Harrington
  • Jaret Treber

Abstract

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. (JEL L51, L84, L88)

Suggested Citation

  • David E. Harrington & Jaret Treber, 2020. "Constraining Competition With State Mandated Facility Requirements," Contemporary Economic Policy, Western Economic Association International, vol. 38(4), pages 659-674, October.
    • Handle: RePEc:bla:coecpo:v:38:y:2020:i:4:p:659-674
    DOI: 10.1111/coep.12470
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    References listed on IDEAS

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    2. Judith A. Chevalier & Fiona M. Scott Morton, 2008. "State Casket Sales Restrictions: A Pointless Undertaking?," Journal of Law and Economics, University of Chicago Press, vol. 51(1), pages 1-23, February.
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    5. Harrington, David E & Krynski, Kathy J, 2002. "The Effect of State Funeral Regulations on Cremations Rates: Testing for Demand Inducement in Funeral Markets," Journal of Law and Economics, University of Chicago Press, vol. 45(1), pages 199-225, April.
    6. David E. Harrington, 2007. "Markets: Preserving Funeral Markets with Ready-to-Embalm Laws," Journal of Economic Perspectives, American Economic Association, vol. 21(4), pages 201-216, Fall.
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    More about this item

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L84 - Industrial Organization - - Industry Studies: Services - - - Personal, Professional, and Business Services
    • L88 - Industrial Organization - - Industry Studies: Services - - - Government Policy

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