Gratuities and customer appraisal of service: Evidence from Minesota restaurants

Bodvarsson, Örn B.; Gibson, William A.

doi:10.1016/1053-5357(94)90005-1

Cited by 87 publications

(83 citation statements)

References 5 publications

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“…The later explanation is consistent with findings of Bodvarsson and Gibson (1994) who corrected for the service quality endogeneity by estimating the relationship between the gratuity size and its determinants using a TSLS model. They found a strong relationship between the gratuity size and the service quality in their exit survey data.…”

Section: Literature Reviewsupporting

confidence: 72%

“…However, empirical results are mixed. Several studies found out that regular patrons tip more than the one-time customers, see Lynn and Grassman (1990), Lynn and McCall (2000), Conlin, Lynn, and O'Donoghue (2003), Bodvarsson and Gibson (1994), Azar (2007b), and Azar (2010b). On the other hand, Bodvarsson and Gibson (1997) found the relationship statistically significant only in two of seven restaurants, and even there it was small.…”

Section: Literature Reviewmentioning

confidence: 96%

“…Lynn (2003) found very a weak relationship, and so did Azar (2009). Bodvarsson and Gibson (1994) offer an explanation of the discrepancy between the results of the hypothetical and exit surveys. They claim that the relationship between the gratuity size and the service quality cannot be estimated from the exit survey data because the variability of the quality measures is too small (on the quality scale of one to five, most customers rank the quality as four or five).…”

Section: Literature Reviewmentioning

confidence: 99%

“…However, some researchers found lower gratuities. For instance, Bodvarsson and Gibson (1994) report only 11 %. Moreover, the social norm holds true only on average and there are significant differences between individuals.…”

Section: Literature Reviewmentioning

confidence: 99%

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Determinants of Gratuity Size in the Czech Republic: Evidence from Four Inexpensive Restaurants in Brno

Kvasnička¹,

Szalaiová

2015

Review of Economic Perspectives

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Abstract:The paper presents the results of the first study exploring what factors influence tipping in restaurants in the Czech Republic. It shows that the tipping norm evolved here into a form that has some features similar to the tipping norms known in the USA, Canada, and Israel, but there are also striking differences. As in the three countries, the gratuity increases with the bill size but the gratuity as percentage of the bill is much lower here. The bill size explains here a lower part of the gratuity variability too. Also, the service quality results in customers being more generous with their tips, and though the increase in gratuity seems to be small, it rises with a group size. Strikingly, the regular patrons tip significantly less in the Czech Republic and they stiff more often. This supports the hypothesis that the relationship between the customer frequency and the gratuity size is an artifact of a missing variable, and the regular patrons tip differently because they belong to a different social group than occasional customers. Also, the customers paying by card stiff more often here and the interaction between the amount on the bill and use of payment card is statistically insignificant. The group size lowers the percentage gratuity, which supports the diffusion of the responsibility hypothesis. There are differences between genders: Male customers leave bigger tips than female customers, and female waitresses earn more than their male colleagues. The time spent at the table, consumption of alcoholic beverage, and smoking do not change the gratuity size but it may be affected by the weather conditions. The customers tip less and stiff more often when they order a lunch special. They round the total expenditures, not the gratuities, which creates the magnitude effect.

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Section: Literature Reviewsupporting

confidence: 72%

Section: Literature Reviewmentioning

confidence: 96%

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

See 2 more Smart Citations

Determinants of Gratuity Size in the Czech Republic: Evidence from Four Inexpensive Restaurants in Brno

Kvasnička¹,

Szalaiová

2015

Review of Economic Perspectives

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“…This finding implied that servers could boost the amount of their income by selling higher priced beverages and appetizers that would increase the bill. Bodvarsson and Gibson (1994) also reported that gratuities depended on bill size and that bill size and the amount of service were related. Larger orders of beverages and food required greater amounts of service.…”

Section: Discussionmentioning

confidence: 97%

Effect of Server Posture on Restaurant Tipping¹

Lynn

Mynier

1993

J Applied Social Pyschol

102

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Optimal Monitoring with External Incentives: The Case of Tipping

Azar

2004

Southern Economic Journal

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This article examines the optimal choice of monitoring intensity when workers face external incentives (incentives that are not provided by the firm), such as tips, satisfaction from working well, or the desire to build reputation in order to be more attractive to other employers. Increase in such external incentives reduces optimal monitoring intensity but nevertheless increases effort and profits unambiguously. The model explains why U.S. firms supported the establishment of tipping in the late 19th century and raises the possibility that European firms make costly mistakes by replacing tips with service charges.

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Gratuities and customer appraisal of service: Evidence from Minesota restaurants

Cited by 87 publications

References 5 publications

Determinants of Gratuity Size in the Czech Republic: Evidence from Four Inexpensive Restaurants in Brno

Determinants of Gratuity Size in the Czech Republic: Evidence from Four Inexpensive Restaurants in Brno

Effect of Server Posture on Restaurant Tipping¹

Optimal Monitoring with External Incentives: The Case of Tipping

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Gratuities and customer appraisal of service: Evidence from Minesota restaurants

Cited by 87 publications

References 5 publications

Determinants of Gratuity Size in the Czech Republic: Evidence from Four Inexpensive Restaurants in Brno

Determinants of Gratuity Size in the Czech Republic: Evidence from Four Inexpensive Restaurants in Brno

Effect of Server Posture on Restaurant Tipping1

Optimal Monitoring with External Incentives: The Case of Tipping

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Effect of Server Posture on Restaurant Tipping¹