Document Type

Thesis - Open Access

Award Date

2018

Degree Name

Master of Science (MS)

Department

Economics

First Advisor

David E. Davis

Keywords

demand for personal interest, demand for social interest, likelihood of leaving a tip National Household Food Acquisition and Purchase Survey, tip size, US restaurants

Abstract

This study aims to analyze people’s tipping behavior to assess the factors that determine both the likelihood of leaving a tip and tip size in US restaurants. A total 2,334 away from home eating events are considered in this study based on the nationally representative National Household Food Acquisition and Purchase Survey (FoodAPS) dataset. Two different tipping scenarios are considered for full-service restaurants to examine differences in customers’ behavior under two different situations. Considering that households’ tipping decisions and tip sizes are functions of the demand for personal interest (D"#, ) and the demand for social interest (D&#), different socio-demographic, behavioral and economic factors are used as proxies for D"# and D&#. Results show that households’ average tip size varies from 16% to 19% depending on the particular restaurant and tipping scenario. Hypothesis testing and regression analysis confirm that households’ average monthly income has no influence on the tip size, rather demographic and cultural factors like gender, race and birthplace are significant determinants of tipping behavior. The overall analysis demonstrates that households’ tipping decisions and tip sizes are functions of their social interest. Thus, it is evident that consumers view tipping more as a social norm rather than purely self-interested rational behavior.

Description

Includes bibliographical references

Format

application/pdf

Number of Pages

61

Publisher

South Dakota State University

Rights

In Copyright - Educational Use Permitted
http://rightsstatements.org/vocab/InC-EDU/1.0/

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