Funeral Costs, Saving Behaviour and HIV/AIDS.

The purpose of the paper is to highlight that funeral costs matter in households' decisions. In particular they do matter in the understanding of the impact of HIV/AIDS on households' wealth in developing countries. Nevertheless the magnitude of the implications on households through the channel of funerals depends deeply on funeral social norms and on individual characteristics. Four funeral motives household models are drawn in order to understand the complex relationship between households' wellbeing, funerals and HIV/AIDS. They differ in the existence of funeral social norms and in two specific funeral motives, joy of proper funeral or altruistic funeral motive. A preliminary analysis of the Centre for Health Systems Research & Development survey on socioeconomic impact of HIV/AIDS in South Africa illustrates first that funeral costs alter the long term behaviour of households. Then it suggests that HIV/AIDS changes the funeral behaviour in particular by lowering life expectancies. A relative funeral social norm rather than an absolute on influences the magnitude of funeral expenses. Finally, households appear to behave according to the joy of proper funeral motive rather than the altruistic funeral motive.HIV/AIDS, saving behaviour; household, decision theory; optimal control; funerals.