Understanding tipping behaviour - an economic perspective

Abstract

There are generally three explanations for tipping: social approval, equitable service exchange and other reasons. The combination and importance of these reasons differ between countries and cultures. In this study, three distinct questions were asked. What influences the frequency of the tipping decision? What influences the magnitude of the tip given? Who is likely to tip more than the norm? A survey among diners was conducted at one of South Africa’s largest arts festivals. Using regression analyses, this paper aims to identify the factors that influence tipping behaviour in South Africa. While most previous research has focused on motivational and/or psychological reasons for tipping, this research contributes towards understanding tipping from an economic perspective. The results show that the frequency of tipping and its magnitude are a function of the ability to pay. However, socio-demographics play an important role, especially in the paying of the above-normal tip.