An Objective Measure of Service and Its Effect on Tipping

Abstract

The effect of service quality on tipping is not well documented. Surveys indicate-at least a weak relationship between service quality and the size of the tip. We look at an objective measure of service, the time it takes a delivery driver to deliver an order to a customer and relate it to the subsequent tip. We estimate a regression model that confirms that the tip percentage increases as the time to delivery decreases, while controlling for such factors as income, gender, and race. Therefore, while tipping is subject to strong social norms, we at least provide some evidence that service quality also affects the probability and size of a tip. (Dl2, C20, A12)