Cost of living indexes do not predict what a funeral costs

The finding

The Bureau of Economic Analysis publishes Regional Price Parities, an index of how expensive a state or metro is against a national 100. It is the standard tool for turning a national figure into a local one, and it is what this site used to spread the National Funeral Directors Association's divisional medians across the states.

Across the 44 states where we hold 40 or more measured direct cremation prices, the correlation between a state's services price parity and the median price its funeral homes actually charge is -0.111 by Pearson and -0.026 by Spearman.

Forty four states is not a large sample for a correlation, so the honest statement is a bound rather than a zero. The 95% confidence interval runs -0.395 to 0.192. We cannot prove there is no relationship at all. We can rule out a positive one stronger than 0.192, which is an index explaining at most 4% of the variation between states. The method assumes it explains most of it.

The index is not broken. Services parity against housing parity, across all 51 states, is 0.71, which is what you would expect from an index whose components move together. The parities measure something real. They simply do not reach the price of a funeral.

What was tested

Direct cremation, because it is the one funeral service that is genuinely the same product everywhere. No viewing, no ceremony, no casket, no choice of anything. If a price index can localise any funeral price, it can localise this one.

The prices come from 19,805 operating US funeral homes in our directory, of which 12,244 carry a direct cremation price and 11,747 carry a basic services fee. Closed and unconfirmed licences are excluded throughout. For each state we take the median of its measured prices and compare it with that state's BEA services parity. A state needs 40 prices to be included, which leaves 44 of them.

For scale, the national picture is sound and that matters. The median of all 12,244 measured prices is $1,995 against NFDA's national median of $2,202. Two independent measurements of the same thing, four percent apart. The survey is good. It is the spreading that fails.

Trying to break it

A null result is only worth publishing if you have tried to kill it. The obvious objection is that our directory over-samples cheap cremation specialists in some states and not others, which would manufacture exactly this pattern. So the test was rerun inside each source separately, inside the verified tier alone, and with the sample floor raised.

The Funeral Consumers Alliance row matters most. That is a consumer advocacy organisation's own price survey, collected independently of any directory and with no commercial interest in the answer. It returns the same nothing.

How wrong it got

A correlation of zero does not mean the errors are small. It means they are unrelated to the thing being corrected for. Against the method this site used to run, the model overstated Oregon by 73 percent and understated North Dakota by 34 percent.

The pattern in that table is the finding in miniature. The states an index calls expensive, the west coast and the north east, are where a direct cremation is cheapest. The states it calls cheap, the upper midwest and the plains, are where it costs most.

What does predict a price

Another price from the same firm. Across 42 states, the median basic services fee and the median direct cremation price correlate at 0.815. A funeral home that charges more for one charges more for the other, and that holds far more tightly than anything about the place it sits in.

Which is the practical lesson underneath the statistics. Price is a property of the business, not of the postcode. In Cleveland the same direct cremation runs from $695 to $3,950, a spread of 5.7 times inside one metropolitan area. No index of local costs can see a gap like that, because the gap is not about local costs. The full spread study is here.

The direction is backwards too

Cost of living indexes rate metropolitan areas as expensive. For direct cremation they are cheaper, and the largest are cheapest of all, which is the opposite of what the method assumes. Competition and volume beat rent.

It holds in the Funeral Consumers Alliance survey on its own, $1,950 inside a metro against $2,300 outside, so it is a fact about the market rather than an artefact of one directory.

What we changed on this site

This page went up after the change, not before it. On 9 September 2026 every funeral home figure on burialestimator.com stopped going through a price index. Direct cremation is now the measured median of the homes we hold prices for in that metro or state, with no scaling of any kind, and each page says how many homes it came from. The rest of the funeral home charges are still anchored to the NFDA divisional median, but spread by the basic services fees local homes publish themselves.

Cemetery lines are the one exception and still use a land price index, because we hold no measured plot, vault or headstone prices anywhere, and the price of land is the one thing a housing parity is genuinely built to measure. When we can measure those, they will change too.

If you publish cost by city pages in any category, the test is cheap and you should run it. Collect real prices in enough places, take the median per place, correlate against whatever index you are multiplying by. If it comes back near zero, the index is adding noise and telling your readers something confident and wrong.

What this cannot tell you

• The sample is not random. These are funeral homes whose price we could find, and a home that publishes a price may not charge like one that does not. It is the largest such collection we know of, 12,244 prices, but it is not a census.
• It bounds the relationship, it does not disprove one. With 44 states the interval still admits a weak positive correlation up to 0.192. What it rules out is one strong enough to justify the method.
• One service, tested because it is the one that is identical everywhere. Direct cremation. Nobody publishes full service funeral prices at a scale that would let anyone test those, which is part of why this went unchecked for so long.
• Prices carry mixed dates. Most are undated in the source. Among those that are dated, medians by year of publication run $1,845 to $2,295 with no visible trend, so we found no age effect, but we cannot rule one out.
• State medians discard what happens inside a state, which is where most of the variation lives. That is the point rather than a flaw, but it means this says nothing about any individual funeral home.

Citing this, and the data

Free to quote and republish with attribution and a link. The state table behind it is published as a file so you do not have to take any of this on trust, price-index-null.csv, one row per state with the measured median, the sample size, the BEA parity and what the old model said.

Burial Estimator, “Cost of living indexes do not predict what a funeral costs”, September 2026. Analysis of 12,244 measured direct cremation prices at US funeral homes against BEA Regional Price Parities. https://burialestimator.com/research/price-index-null

Researchers and journalists are welcome to the full price file behind this, with the source and date attached to every individual figure. There is no charge and no conditions beyond attribution.

More research from Burial Estimator · The cremation price spread study