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The History of Tipping - From Sixteenth-Century England to United States in the 1910s

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  • Ofer H. Azar

    (Northwestern University)

Abstract

Tipping is a multi-billion-dollar phenomenon that challenges the traditional assumption of selfish economic agents who have no feelings and do not care about social norms. This article reviews the early history of tipping and offers an economic analysis of different aspects of tipping. Using the historical evidence, it then addresses two major questions about tipping: why do people tip? And does tipping improve service quality? The reasons for tipping changed over the years, but conforming to social norms and avoiding embarrassment were generally the main reasons. Tipping seems to improve service quality; the extent of the improvement varies across occupations.

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File URL: http://128.118.178.162/eps/eh/papers/0309/0309001.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Economic History with number 0309001.

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Date of creation: 04 Sep 2003
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Handle: RePEc:wpa:wuwpeh:0309001

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Web page: http://128.118.178.162

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Keywords: Tipping; History; Social norms; Feelings;

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References

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  1. Azar, Ofer H., 2004. "What sustains social norms and how they evolve?: The case of tipping," Journal of Economic Behavior & Organization, Elsevier, vol. 54(1), pages 49-64, May.
  2. Fortin, Pierre & Keil, Manfred & Symons, James, 2001. "The Sources of Unemployment in Canada, 1967-91: Evidence from a Panel of Regions and Demographic Groups," Oxford Economic Papers, Oxford University Press, vol. 53(1), pages 67-93, January.
  3. Bodvarsson, Orn B. & Gibson, William A., 1994. "Gratuities and customer appraisal of service: Evidence from Minesota restaurants," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 23(3), pages 287-302.
  4. Ofer H. Azar, 2003. "The Social Norm of Tipping: A Review," Others 0309006, EconWPA.
  5. 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.
  6. Wessels, Walter John, 1997. "Minimum Wages and Tipped Servers," Economic Inquiry, Western Economic Association International, vol. 35(2), pages 334-49, April.
  7. Lynn, Michael & Grassman, Andrea, 1990. "Restaurant tipping: an examination of three 'rational' explanations," Journal of Economic Psychology, Elsevier, vol. 11(2), pages 169-181, June.
  8. Ofer H. Azar, 2003. "The implications of tipping for economics and management," Others 0309002, EconWPA.
  9. Lynn, Michael & Zinkhan, George M & Harris, Judy, 1993. " Consumer Tipping: A Cross-Country Study," Journal of Consumer Research, University of Chicago Press, vol. 20(3), pages 478-88, December.
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Citations

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Cited by:
  1. Azar, Ofer H., 2011. "Business strategy and the social norm of tipping," Journal of Economic Psychology, Elsevier, vol. 32(3), pages 515-525, June.
  2. Azar, Ofer H., 2007. "Why pay extra? Tipping and the importance of social norms and feelings in economic theory," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 36(2), pages 250-265, April.
  3. Azar, Ofer H., 2006. "Behavioral economics and socio-economics journals: A citation-based ranking," MPRA Paper 4377, University Library of Munich, Germany.
  4. Azar, Ofer H., 2012. "The effect of the minimum wage for tipped workers on firm strategy, employees and social welfare," Labour Economics, Elsevier, vol. 19(5), pages 748-755.
  5. Tin-Chun Lin, 2007. "Economic Behavior of Restaurant Tipping," Economics Bulletin, AccessEcon, vol. 4(2), pages 1-10.
  6. Tobias Regner, 2005. "Why Voluntary Contributions? Google Answers," The Centre for Market and Public Organisation 05/115, Department of Economics, University of Bristol, UK.

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