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Tipping Types

Explore tipping behavior in the service industry, focusing on statistical discrimination by restaurant servers. Research examines how server performance minimally affects tip size and identifies racial groups with below-average tipping averages. Discover self-fulfilling prophecy effects and implications for service strategies in Roseville, CA.

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Tipping Types

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  1. Tipping Types A Study of Statistical Discrimination in Restaurants

  2. Statistical Discrimination. • Tipping Behavior in Service Industries. • In particular… the Restaurant Industry. What We Are Looking At Research Question: Is variation in tipping behavior consistent with statistical discrimination by restaurant servers?

  3. The LiteratureTipping Behavior & Statistical Discrimination Server performance has a significant, but very small, effect on the size of tips (Lynn, 2000). Two articles by Lynn (2003 & 2004) identify racial groups with tipping averages under the social norm. Mallinson & Brewster (2005) show stereotypes are often a result of positive self-image and negative other-image. Caution: self-fulfilling prophecy effect of statistical discrimination (Lippert-Rasmussin, 2007).

  4. The Data • Demographic: Roseville, CA. • Unit of Analysis: the host, or person paying the bill, of each table served. • All observations strictly observational.

  5. Age and Gender Distribution

  6. Racial Distribution

  7. Tip Percentage Histogram

  8. Hypotheses & Model • H0: βx= 0 • Ha: βx≠ 0 • Where X represents any characteristic theorized to have a significant effect on tipping behavior. • Model: Statistical Discrimination • Yi = βXi + εi • Where Y represents an unobserved characteristic and X is the observed characteristic.

  9. Regression Results

  10. Conclusion Observed characteristics have statistically significant, but very small, effects on tipping behavior. Considering the low r-squared, unpredictable variations will occur. Servers should only apply varied service levels on the margin, i.e. when constraints do not allow all tables to receive their highest level of service.

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