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It is. Prices for basic services are lower in tipping cultures, ceteris paribus, since staff wages are a component of price, and staff wages are lower in a tip
by hntrader 6y ago
It is.
Prices for basic services are lower in tipping cultures, ceteris paribus, since staff wages are a component of price, and staff wages are lower in a tipping culture since they make part of their income from tipping.
Hence, the cheap customer benefits to the maximum in a tipping culture since the prices they're paying are artificially lower as they've been subsidised by tippers. That's why it's a transfer of wealth from the generous to the cheap.
It's got little to do with whether the generous decide to tip more in the presence of the cheap (although that may be a small part of it), it's about the indirect and hidden subsidisation through service price.
- ComodoHacker 6y agoWhen you s/cheap customer/poor customer/ the whole thing sounds slightly different.
- hntrader 6y agoThis would make for a very interesting academic study, to figure out whether variation in tip size is driven more by personality dimensions (agreeability, generosity, etc) or by socioeconomic status. Presumably it's a combination of both, where on a diverse platform like Uber it weighs more heavily towards socioeconomic drivers and in a more homogeneous environment like an expensive restaurant it comes down more to personality traits.