IDEAS home Printed from https://ideas.repec.org/p/dpr/wpaper/0738.html
   My bibliography  Save this paper

Why Do We Tip Taxicab Drivers?

Author

Listed:
  • David Flath

Abstract

The leading economic explanation for tipping -that is, explanation why the practice is socially beneficial, not why individuals leave tips even though it is not narrowly advantageous to them- is that it confers an incentive to provide personal services. This fits many instances in which tipping is common but does not fit the taxicab business very well. I propose a novel explanation for tipping that does fit the taxi case. It is that tipping amounts to Lindahl pricing of the services of vacant cabs (essentially, reduced waiting time), a local public good for taxi customers.

Suggested Citation

  • David Flath, 2009. "Why Do We Tip Taxicab Drivers?," ISER Discussion Paper 0738, Institute of Social and Economic Research, Osaka University.
  • Handle: RePEc:dpr:wpaper:0738
    as

    Download full text from publisher

    File URL: http://www.iser.osaka-u.ac.jp/library/dp/2009/DP0738.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Mohring, Herbert, 1972. "Optimization and Scale Economies in Urban Bus Transportation," American Economic Review, American Economic Association, vol. 62(4), pages 591-604, September.
    2. 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.
    3. Flath, David, 2006. "Taxicab regulation in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 20(2), pages 288-304, June.
    4. 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.
    5. Arnott, Richard, 1996. "Taxi Travel Should Be Subsidized," Journal of Urban Economics, Elsevier, vol. 40(3), pages 316-333, November.
    6. Cairns, Robert D. & Liston-Heyes, Catherine, 1996. "Competition and regulation in the taxi industry," Journal of Public Economics, Elsevier, vol. 59(1), pages 1-15, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Amir B. Ferreira Neto & Adam Nowak & Amanda Ross, 2017. "Do tourists tip more than local consumers? Evidence of taxi rides in New York City," Working Papers 17-14, Department of Economics, West Virginia University.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dpr:wpaper:0738. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Fumiko Matsumoto). General contact details of provider: http://edirc.repec.org/data/isosujp.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.