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Restaurant Tipping Discrimination: Evidence from a Representative Sample of US Households

Nusrat Jahan, Andrea Leschewski and David E. Davis ORCID logo

Abstract

Discrimination in tipping creates concerns of inequity in service quality for restaurant operators (Brewster 2017). We use the National Household Food Acquisition and Purchase Survey data to conduct one of the very few nationally representative examinations of tipping behavior at US restaurants. We focus on differences in tipping behavior between groups with identifiable characteristics and investigate whether tipping differences between groups are robust to inclusion of a variety of controls. We investigate tipping at the extensive and intensive margins. In contrast to earlier studies, we find little evidence that tipping varies by race and gender.


Corresponding author: David E. Davis, Professor, Ness School of Management and Economics, South Dakota State University, 246 Harding Hall, Brookings, SD57007, USA, E-mail:

Nusrat Jahan: Currently a Ph.D. candidate at the Department of Economics, 501 Fletcher Argue Building, University of Manitoba, Winnipeg, Manitoba R3T 5V5, Canada.


Funding source: South Dakota State Experiment Station

Funding source: USDA National Institute of Food and Agriculture

Award Identifier / Grant number: SD00H675-18

Acknowledgment

This work was supported by the South Dakota State Experiment Station and USDA National Institute of Food and Agriculture, Hatch project number SD00H675-18.

  1. a

    Currently a Ph.D. candidate at the Department of Economics, 501 Fletcher Argue Building, University of Manitoba, Winnipeg, Manitoba R3T 5V5, Canada.

  2. 1

    “Stiffing” is the colloquial term used in this literature for a patron’s failure to leave a tip.

  3. 2

    Specifically, we eliminated purchases at bakeries, burger and hotdog restaurants, café and bakery cafes, chicken restaurants, coffee shops, dairy desserts (ice cream, frozen yogurt), miscellaneous specialty, sandwich shops, and vending machines.

  4. 3

    We began with the food away from home event data set from FoodAPS. We merged this data set with the data sets that included household and individual characteristics. We created a subsample of observations as detailed in the text and conducted analysis on this subsample using the “subpop” option in Stata.

  5. 4

    We also estimated the Tip Decision models using Probit. Marginal effects from the Probit estimates were quantitatively and quantitatively similar to those reported in the text.

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Received: 2020-04-08
Accepted: 2020-09-21
Published Online: 2020-10-07

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