Why are we more likely to tip some service occupations than others? Theory, evidence, and implications

Abstract

Ideas about why consumers tip some service occupations more often than others are tested using occupation scores derived from online ratings of 122 service occupations. Results indicate that U.S. consumers are more likely to tip occupations for which (i) workers' performances can be more easily evaluated by consumers than by managers, (ii) workers provide customized service, (iii) workers' income, skill and needed judgment are low, and (iv) workers are less happy than customers during the service encounter. Occupations with greater frequency of customer patronage and/or greater likelihood of encountering the same service provider on multiple service occasions are not more likely than other occupations to be tipped. These findings support some and disconfirm other expectations derived from a theory that occupational differences in tipping are attributable to occupation characteristics that more strongly/consistently evoke motives for tipping. They also identify types of services for which counternormative tipping policies are more or less likely to be successful and suggest sources of resistance that must be overcome if those policies are to succeed.

The Drivers of Social Preferences: Evidence from a Nationwide Tipping Field Experiment

“…This result is in accord with the Mturk survey of Lynn (2016), who reports that men are better tippers than women (see also Lynn et al (1993) and the cites therein). The literature on who tips and who is tipped has argued broadly that demographics such as gender matter, and past work documents differences in the economic preferences and outcomes for men and women (see Croson and Gneezy (2009) for a survey), but there are mixed results with respect to social preference differences across men and women.…”

The Tipping Behavior and Motives of US Travelers Abroad: Affected by Host Nations’ Tipping Norms?

“…For example, individual differences in self-reports of these motivations for tipping have been found to predict the likelihood of tipping and/or tip size in many, though not all, published (see Table 1) and unpublished (Shrestha 2014) studies. This research has also found that attitude toward tipping predicts unique variance in tipping likelihood above and beyond that predicted by self-reported tipping motives (Lynn 2016a, 2018).…”

“…Lynn (2015b, 2016a, 2018) has argued that the motivations underlying tipping should depend on, or vary with, descriptive and injunctive tipping norms. Selectively using and modifying his evolving ideas, we theorize that altruistic, reciprocity, and duty motives underpinning tipping are likely to be weakened when tipping is rare and not customary because the absence of tipping may suggest/signal that the service worker is adequately compensated via wages.…”

“…In particular, the interactions of tipping norms with social-esteem and reciprocity motives differed across the studies and deserve to be reexamined. Second, the operationalization of tipping norms via different occupations confounded the differences in tipping norms with other occupational characteristics, such as frequency of use, occupational status, and service customization (see Lynn 2016a, 2018). Lynn (2018) controlled for many of these potential confounds one at a time in occupation-level analyses, but did not have the sample size needed to simultaneously control for all of them.…”

Design and Analysis of Cluster-Randomized Field Experiments in Panel Data Settings

“…For instance, even though tipping has played an important role for centuries in modern economies and remains a hallmark of service economies, until recently economists have not made deep contributions in the area. Notable recent exceptions include the excellent work of Conlin et al (2003), Azar (2007), and Lynn (2016). While these authors have made important inroads into the phenomenon of tipping, many open questions remain.…”