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Who uses tips as a reward for service and when? An examination of potential moderators of the service–tipping relationship

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  • Lynn, Michael
  • Jabbour, Patrick
  • Kim, Woo Gon

Abstract

Consumers in many countries often give voluntary payments of money (tips) to the workers who have served them. These tips are supposed to be a reward for service and research indicates that they do increase with customers’ perceptions of service quality. This paper contributes to the service–tipping literature by examining numerous potential moderators of this relationship in two studies. Results indicate that the service–tipping relationship is robust across meal type, day of week, sex and race of server as well as customers’ alcohol consumption, education, income, race, worship frequency, and hospitality work experience, but that it is stronger for older consumers than for younger ones and for parties with large bills than for parties with smaller bills. The practical and theoretical implications of these and other findings are discussed.

Suggested Citation

  • Lynn, Michael & Jabbour, Patrick & Kim, Woo Gon, 2012. "Who uses tips as a reward for service and when? An examination of potential moderators of the service–tipping relationship," Journal of Economic Psychology, Elsevier, vol. 33(1), pages 90-103.
    • Handle: RePEc:eee:joepsy:v:33:y:2012:i:1:p:90-103
    DOI: 10.1016/j.joep.2011.09.009
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    References listed on IDEAS

    as
    1. Saunders, Stephen G. & Lynn, Michael, 2010. "Why tip? An empirical test of motivations for tipping car guards," Journal of Economic Psychology, Elsevier, vol. 31(1), pages 106-113, February.
    2. Azar, Ofer H., 2011. "Business strategy and the social norm of tipping," Journal of Economic Psychology, Elsevier, vol. 32(3), pages 515-525, June.
    3. Ofer H. Azar, 2007. "Do people tip strategically, to improve future service? Theory and evidence," Canadian Journal of Economics, Canadian Economics Association, vol. 40(2), pages 515-527, May.
    4. Conlin, Michael & Lynn, Michael & O'Donoghue, Ted, 2003. "The norm of restaurant tipping," Journal of Economic Behavior & Organization, Elsevier, vol. 52(3), pages 297-321, November.
    5. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-741, September.
    6. David L. Dickinson & Jill Tiefenthaler, 2002. "What Is Fair? Experimental Evidence," Southern Economic Journal, John Wiley & Sons, vol. 69(2), pages 414-428, October.
    7. Azar, Ofer H., 2011. "Do people think about absolute or relative price differences when choosing between substitute goods?," Journal of Economic Psychology, Elsevier, vol. 32(3), pages 450-457, June.
    8. Ofer H. Azar, 2003. "The implications of tipping for economics and management," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 30(10), pages 1084-1094, October.
    9. Azar, Ofer H., 2007. "Relative thinking theory," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 36(1), pages 1-14, February.
    10. Ofer H. Azar, 2004. "Optimal Monitoring with External Incentives: The Case of Tipping," Southern Economic Journal, John Wiley & Sons, vol. 71(1), pages 170-181, July.
    11. Ofer Azar, 2009. "Incentives and service quality in the restaurant industry: the tipping-service puzzle," Applied Economics, Taylor & Francis Journals, vol. 41(15), pages 1917-1927.
    12. Ofer H. Azar, 2003. "The Social Norm of Tipping: A Review," Others 0309006, University Library of Munich, Germany.
    13. Garbarino, Ellen C & Edell, Julie A, 1997. "Cognitive Effort, Affect, and Choice," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 24(2), pages 147-158, September.
    14. Lynn, Michael & McCall, Michael, 2000. "Gratitude and gratuity: a meta-analysis of research on the service-tipping relationship," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 29(2), pages 203-214.
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    Citations

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    Cited by:

    1. Fielding, David & Knowles, Stephen & Robertson, Kirsten, 2018. "Alcohol, generosity and empathy," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 76(C), pages 28-39.
    2. Elif Aydin, Asli & Acun, Yüksel, 2019. "An investigation of tipping behavior as a major component in service economy: The case of taxi tipping," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 78(C), pages 114-120.
    3. Lynn, Michael, 2016. "Why are we more likely to tip some service occupations than others? Theory, evidence, and implications," Journal of Economic Psychology, Elsevier, vol. 54(C), pages 134-150.
    4. Thrane, Christer & Haugom, Erik, 2020. "Peer effects on restaurant tipping in Norway: An experimental approach," Journal of Economic Behavior & Organization, Elsevier, vol. 176(C), pages 244-252.
    5. Azar, Ofer H. & Yosef, Shira & Bar-Eli, Michael, 2015. "Restaurant tipping in a field experiment: How do customers tip when they receive too much change?," Journal of Economic Psychology, Elsevier, vol. 50(C), pages 13-21.
    6. Lynn, Michael, 2015. "Service gratuities and tipping: A motivational framework," Journal of Economic Psychology, Elsevier, vol. 46(C), pages 74-88.
    7. Osman Ahmed El-Said & Hossam Said Shehata, 2017. "Tipping Motives in Egyptian Restaurants: Customers’ View," Tourism Research Institute, Journal of Tourism Research, vol. 16(1), pages 176-198, June.
    8. Lynn, Michael & Flynn, Sean Masaki & Helion, Chelsea, 2013. "Do consumers prefer round prices? Evidence from pay-what-you-want decisions and self-pumped gasoline purchases," Journal of Economic Psychology, Elsevier, vol. 36(C), pages 96-102.
    9. Lynn, Michael, 2021. "The effects of injunctive and descriptive tipping norms on tipping behavior and motives," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 95(C).
    10. Cabano, Frank G. & Attari, Amin, 2023. "Don’t tell me how much to tip: The influence of gratuity guidelines on consumers’ favorability of the brand," Journal of Business Research, Elsevier, vol. 159(C).
    11. Conlisk, Sarah, 2022. "Tipping in crises: Evidence from Chicago taxi passengers during COVID-19," Journal of Economic Psychology, Elsevier, vol. 89(C).
    12. Oz Shy, 2015. "Do Tips Increase Workers' Income?," Management Science, INFORMS, vol. 61(9), pages 2041-2051, September.
    13. Lynn, Michael, 2016. "Motivations for tipping: How they differ across more and less frequently tipped services," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 65(C), pages 38-48.

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    More about this item

    Keywords

    Tipping; Service; Relative thinking; Social norms; Service industry;
    All these keywords.

    JEL classification:

    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • M50 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - General
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D10 - Microeconomics - - Household Behavior - - - General
    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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