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Abstract
In his ‘Comment’ in this journal on a recent article in Applied Economics by myself and two coauthors (Bodvarsson, Ő. B., Luksetich, W. A. and McDermott, S. (Citation2003), CitationLynn (forthcoming) makes three criticisms of the study on the relationship between service quality and tips. In one of these criticisms, he reanalyses the data and concludes that the two stage least squares estimate of the marginal effect of service quality on tips is invalid and should be replaced with his own ordinary least squares estimate. The purpose of this ‘Reply’ is to address each criticism and, in particular, to explain why Lynn's ordinary least squares estimate is not valid.
