The Economics of Tipping
Bias and Fairness in Tipping
Studies show that tips can vary by a server's appearance, race, gender and group size, raising concerns of discrimination.
Not always fair.
Evidence
Research finds that attractive servers and those from certain groups can earn higher tips.
Group size
Large groups tend to tip less per person.
Implication
Tips can embed customer prejudices into pay.
Response
Some restaurants pool tips or move to service-inclusive pricing.
A pooled tip
Staff share tips equally at the end of the night.
Assuming tips reflect merit alone
Bias creeps in.
Key takeaways
- Tips can reflect bias.
- Group size affects per-person tips.
- Tips can embed prejudice.
- Pooling and inclusive pricing help.
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