SIR Economics Investigations Abstract
THE ECONOMICS OF TIPPING
Presenter:
Charles Whittaker, Illinois Mathematics and Science Academy
Advisor:
Dr. Allen Sanderson, University of Chicago
Abstract:
On the first night of your family vacation to Miami, you arrive, check in, have the bellman carry your bags to your room, let the valet service park your car and eat a fine dinner. All of these service workers were polite, friendly and efficient, so you decide to tip 18% to your waiter, four dollars – one dollar per suitcase– to the bellman and three dollars for the parking attendant. After dinner you drive to a local mall, spend an hour in your favorite store trying on and buying clothes, but you would never consider giving a tip to the service clerk who assisted you. Why do Americans tip wait staff by the percentage of the bill, tip valets and bellmen, in standard dollar amounts—as opposed to a percentage of how much your car is worth or the bellman a percentage of the value of what’s in your suitcase—and stiff department store clerks, airline pilots and flight attendants, and, in the good old days, elevator operators entirely. The goal of this paper is to identify the social aspects of tipping, explore how tipping practices vary around the world, and try to describe and explain “the economics of tipping.”