What is the significance of the way the story ends in "The Handsomest Drowned Man in the World"?
The story's ending is a testimony to the strength of imagination and the enduring power of myth, extending some of the central themes of the story. The tales built around the dead man's body inspire the people to take pride in their village and fix it up, by among other things building bigger dwellings to lure Esteban's spirit back to visit, and painting existing homes up nicely to honor his memory. The inhabitants will even plant flowers, beautifying the town so that when future voyagers on passing ocean liners go by, they will take notice, and go on to spread the myth of Esteban in a positive way.
The village in which the body of the drowned man washes up is small, barren, and insignificant. The people, amazed by the drowned man's size, adopt him so to speak, and begin to personalize him, making up stories about him to explain his unusual physiognomy. These actions are illustrative of societies' tendency to create explanations for things out of the realm of their experience, which they cannot fully understand. In working together to prepare the body for burial, the people become unified by the myths they are creating about the man, and this burgeoning group identity stimulates a newfound sense of pride. Because of the drowned man, the villagers put forth efforts to make their environment pleasing to the eye. They also take steps to preserve Esteban's memory, and dedicate their endeavors to making it widespread and everlasting.