Tipping and service quality: results from a large database

Abstract

Tipping is a big business in the United States economy. We use a large data base from a restaurant delivery service to determine if the quality of service, as measured by the delivery time, is a significant determinant of the percentage tip by the customer. After controlling for the demographic characteristics, the location and income of the customer as well as the payment method, we find that the percentage tip decreases by 0.12% for every minute of delivery time. Similar to other studies we find that minorities and the elderly tend to tip smaller amounts than do other groups.