Affiliations: [a] Department of Marketing, George Mason University,
Fairfax, VA 22030-4444, USA | [b] Survey Research Laboratory, University of Illinois,
Urbana-Champaign, IL 61801, USA
Note: [1] The data upon which this study is based was provided to the Internal Revenue
Service under contract TIR 82-21 by the Survey Research Laboratory,
University of Illinois.
Abstract: Unique panel data provided by NPD Research, Inc., were used to investigate the
magnitude and interactive effects upon tipping aggregates and levels. The
analysis revealed that tips by American households aggregate to $6.2, $6.3, and
$6.7 billion annually in restaurants and other eating places in 1982, 1983, and
1984 respectively. The information was collected by means of diaries kept by the
tippers themselves, which was regarded as a more accurate source than inquiries
of either the tip recipients or their employers. The paper covers the
relationship between the characteristics of the tippers and of the tipping
occasions and the propensity and magnitude of tipping. One finding of the
regression analysis is that there are sizable differences in tip rates across
tipping type restaurant categories when the combined effects of geographic
region, metropolitan size, and restaurant options such as acceptance of credit
cards and reservations and service of alcoholic beverages are considered.
