An economic approach to tips and service quality: Results of a survey

Previous literature on restaurant tipping has generally found that diner as sessment of service quality is a weak explanator of tip size. We argue that this finding is suspect because of two problems in the way service quality is measured. First, in these studies service quality measures are based on customer-supplied cardinal rankings of quality made after-the-fact. This f alsely assumes interpersonal comparability of service. Second, quality rank ings typically displayed very low variation because most diners reported se rvice as having been good. If tipping is effective in promoting good servic e, low variation in quality rankings will result and quality will be an ins ignificant explanator of tips. We ask subjects how they would tip under hyp othetical service quality scenarios, e.g. when service is "satisfactory," " very good" and "poor." We survey 286 students at two universities in Minnes ota and Alberta and find that service quality is actually a strong explanat or of tips.