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Understanding Tipping Behaviour — An Economic Perspective

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  • Melville Saayman
  • Andrea Saayman

Abstract

There are generally three explanations for tipping: social approval, equitable service exchange and other reasons. The combination and importance of these reasons differ between countries and cultures. In this study, three distinct questions were asked. What influences the frequency of the tipping decision? What influences the magnitude of the tip given? Who is likely to tip more than the norm? A survey among diners was conducted at one of South Africa's largest arts festivals. Using regression analyses, this paper aims to identify the factors that influence tipping behaviour in South Africa. While most previous research has focused on motivational and/or psychological reasons for tipping, this research contributes towards understanding tipping from an economic perspective. The results show that the frequency of tipping and its magnitude are a function of the ability to pay. However, socio-demographics play an important role, especially in the paying of the above-normal tip.

Suggested Citation

  • Melville Saayman & Andrea Saayman, 2015. "Understanding Tipping Behaviour — An Economic Perspective," Tourism Economics, , vol. 21(2), pages 247-265, April.
    • Handle: RePEc:sae:toueco:v:21:y:2015:i:2:p:247-265
    DOI: 10.5367/te.2014.0448
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    References listed on IDEAS

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    1. Christian Bladh & HÃ¥kan J. Holm, 2013. "Can Economics Explain Where All-Inclusive Deals are Offered?," Tourism Economics, , vol. 19(2), pages 339-348, April.
    2. Orn Bodvarsson & William Luksetich & Sherry McDermott, 2003. "Why do diners tip: rule-of-thumb or valuation of service?," Applied Economics, Taylor & Francis Journals, vol. 35(15), pages 1659-1665.
    3. Melville Saayman & Andrea Saayman, 2006. "Does the location of arts festivals matter for the economic impact?," Papers in Regional Science, Wiley Blackwell, vol. 85(4), pages 569-584, November.
    4. Lynn, Michael & Wang, Shuo, 2013. "The indirect effects of tipping policies on patronage intentions through perceived expensiveness, fairness, and quality," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 62-71.
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    Cited by:

    1. Uzmanoglu, Cihan, 2022. "The stock market tips," Journal of Empirical Finance, Elsevier, vol. 67(C), pages 271-287.

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