Are you a good tipper?

I’m not. In a recent podcast, Freakonomics explores the world of
tipping and much like Steve Levitt, I find tipping confusing, awkward and
uncomfortable. Note that I’m not opposed to paying for service — I’m perfectly fine with some pre-determined service charge. Let me underscore a few things that stood out in the podcast for me.

Tipping is confusing

Given the plethora of “xyz for dummies” books, I was surprised that there wasn’t a “Tipping for Dummies” book. As evidenced by this post, this is clearly a subject that can use an authoritative handbook. Stephen Dubner says it best:

Why do you tip a hotel doorman, but not the person behind the reception desk? Why tip a baggage handler at the airport, but not the flight attendant? How much is enough for a tip? How much is too much?

Everyone has an opinion on when and how much to tip. Tipping varies from profession to profession, culture to culture, country to country. Can you articulate your own rules for tipping? Do you always pay a percentage or do you sometimes tip a flat amount? Do you tip differently in cabs vs. in restaurants? Does your tip amount correlate with the quality of service?

Tipping is discriminatory

Despite what you do or would like to believe, tipping is heavily influenced our biases and there’s plenty of evidence to indicate that as a society, tipping is discriminatory.

Yes, blondes get better tips than brunettes. Slender women get better tips than heavier women. Large breasted women get better tips than smaller breasted women.

Blacks tip less than whites in this country. They’re more likely to leave without tipping at all. If they do leave a tip it’s on average a smaller amount. They’re more likely to be flat tippers and not tip a percentage of the bill.

Tipping is economically inefficient

We tip a lot in this country. According to Mike Lynn, roughly 40 billion a year. For comparison, NASA’s annual budget is approximately 20 billion. It is not clear whether and how that 40 billion is being actually distributed out to the individual that provided the service. Since people are clearly willing to spend all this money, surely there’s a better way to spend it?

What’s more, apparently there’s a correlation (not causation) between tipping and corruption:

The more tipping you see in a given country, the more corruption you generally see in that country as well.

Tipping is an American phenomenon

The US officially has 31 different service professions that are tipped. I was surprised to learn that India apparently has 26!! Most of Europe is roughly half that number, and the rest of the world probably fewer still.

Most of the world operates on the simple premise of a service charge or a fixed price, no tip expected. The U.S. is empirically tip-crazy.

Why can’t the US do what other people do and add a fixed service charge? (and while we’re at it, adopt the metric system!)

Here’s the full transcript of the podcast.