Determinants of Gratuity Size in the Czech Republic: Evidence from Four Inexpensive Restaurants in Brno

Open access

Abstract

The paper presents the results of the first study exploring what factors influence tipping in restaurants in the Czech Republic. It shows that the tipping norm evolved here into a form that has some features similar to the tipping norms known in the USA, Canada, and Israel, but there are also striking differences. As in the three countries, the gratuity increases with the bill size but the gratuity as percentage of the bill is much lower here. The bill size explains here a lower part of the gratuity variability too. Also, the service quality results in customers being more generous with their tips, and though the increase in gratuity seems to be small, it rises with a group size. Strikingly, the regular patrons tip significantly less in the Czech Republic and they stiff more often. This supports the hypothesis that the relationship between the customer frequency and the gratuity size is an artifact of a missing variable, and the regular patrons tip differently because they belong to a different social group than occasional customers. Also, the customers paying by card stiff more often here and the interaction between the amount on the bill and use of payment card is statistically insignificant. The group size lowers the percentage gratuity, which supports the diffusion of the responsibility hypothesis. There are differences between genders: Male customers leave bigger tips than female customers, and female waitresses earn more than their male colleagues. The time spent at the table, consumption of alcoholic beverage, and smoking do not change the gratuity size but it may be affected by the weather conditions. The customers tip less and stiff more often when they order a lunch special. They round the total expenditures, not the gratuities, which creates the magnitude effect.

AZAR, O. H. (2007a). The Social Norm of Tipping: A Review. Journal of Applied Social Psychology. 37(2), pp. 380-402.

AZAR, O. H. (2007b). Do People Tip Strategically, to Improve Future Service? Theory and Evidence. Canadian Journal of Economics/Revue Canadienne d’économique. 40(2), pp. 515-27.

AZAR, O. H. (2009). Incentives and Service Quality in the Restaurant Industry: The Tipping-service Puzzle. Applied Economics. 41(15), pp. 1917-27.

AZAR, O. H. (2010a). Tipping Motivations and Behavior in the US and Israel. Journal of Applied Social Psychology. 40(2), pp. 421-57.

AZAR, O. H. (2010b). Do People Tip Because of Psychological or Strategic Motivations? An Empirical Analysis of Restaurant Tipping. Applied Economics. 42(23), pp. 3039-44.

BODVARSSON, Ö. B., and GIBSON, W. A. (1994). Gratuities and Customer Appraisal of Service: Evidence from Minnesota Restaurants. The Journal of Socio- Economics. 23(3), pp. 287-302.

BODVARSSON, Ö. B., and GIBSON, W. A. (1997). Economics and Restaurant Gratuities: Determining Tip Rates. American Journal of Economics and Sociology. 56(2), pp. 187-203.

BODVARSSON, Ö. B., and GIBSON, W. A. (1999). An Economic Approach to Tips and Service Quality: Results of a Survey. The Social Science Journal. 36(1), pp. 137-47.

BODVARSSON, Ö. B., LUKSETICH, W. A., and MCDERMOTT, S. (2003). Why Do Diners Tip: Rule-of-Thumb or Valuation of Service? Applied Economics. 35(15), pp. 1659-65.

CONLIN, M., LYNN, M., and O’DONOGHUE, T. (2003). The Norm of Restaurant Tipping. Journal of Economic Behavior & Organization. 52(3), pp. 297-321.

FREEMAN, S., WALKER, M. R., BORDEN, R., and LATANÉ, B. (1975). Diffusion of Responsibility and Restaurant Tipping: Cheaper by the Bunch. Personality and Social Psychology Bulletin. 1(4), pp. 584-87.

GREEN, L., MYERSON, J., and SCHNEIDER, R. (2003). Is There a Magnitude Effect in Tipping? Psychonomic Bulletin & Review. 10(2), pp. 381-86.

HARRIS, M. B. (1995). Waiters, Customers, and Service: Some Tips About Tipping. Journal of Applied Social Psychology. 25(8), pp. 725-44.

HORNIK, J. (1992). Tactile Stimulation and Consumer Response. Journal of Consumer Research. 19(3), pp. 449-58.

KAHNEMAN, D., KNETSCH, J. L., and THALER, R. (1986). Fairness as a Constraint on Profit Seeking: Entitlements in the Market. The American Economic Review. 76(4), pp. 728-41.

LYNN, M. (2003). Restaurant Tips and Service Quality: A Weak Relationship or Just Weak Measurement. International Journal of Hospitality Management. 22(3), pp. 321-25.

LYNN, M. (2006). Tipping in Restaurants and Around the Globe: An Interdisciplinary Review. In Handbook of Contemporary Behavioral Economics: Foundations and Developments, edited by M. Altman, pp. 626-43. M. E. Sharpe Publishers.

LYNN, M. (2009). Determinants and Consequences of Female Attractiveness and Sexiness: Realistic Tests with Restaurant Waitresses. Archives of Sexual Behavior. 38(5), pp. 737-45.

LYNN, M., and GRASSMAN, A. (1990). Restaurant Tipping: An Examination of Three ‘Rational’explanations. Journal of Economic Psychology. 11(2), pp. 169-81.

LYNN, M., and LATANÉ, B. (1984). The Psychology of Restaurant Tipping. Journal of Applied Social Psychology. 14(6), pp. 549-61.

LYNN, M., and LYNN, A. (2004). National Values and Tipping Customs: A Replication and Extension. Journal of Hospitality & Tourism Research. 28(3), pp. 356-64.

LYNN, M., and MCCALL, M. (2000). Gratitude and Gratuity: A Meta-Analysis of Research on the Service-Tipping Relationship. The Journal of Socio-Economics. 29(2), pp. 203-14.

LYNN, M., and SIMONS, T. (2000). Predictors of Male and Female Servers’ Average Tip Earnings1. Journal of Applied Social Psychology. 30(2), pp. 241-52.

LYNN, M., and STURMAN, M. C. (2003). It’s Simpler Than It Seems: An Alternative Explanation for the Magnitude Effect in Tipping. International Journal of Hospitality Management. 22(1), pp. 103-10.

LYNN, M., JABBOUR, P., and KIM, W. G. (2012). Who Uses Tips as a Reward for Service and When? An Examination of Potential Moderators of the Service-tipping Relationship. Journal of Economic Psychology. 33(1), pp. 90-103.

RIND, B., and STROHMETZ, D. (2001). Effect of Beliefs About Future Weather Conditions on Restaurant Tipping. Journal of Applied Social Psychology. 31(10), pp. 2160-64.

ROGELBERG, S. G., PLOYHART, R. E., BALZER, W. K., and YONKER, R. D. (1999). Using Policy Capturing to Examine Tipping Decisions. Journal of Applied Social Psychology. 29(12), pp. 2567-90.

STROHMETZ, D. B., RIND, B., FISHER, R., and LYNN, M. (2002). Sweetening the Till: The Use of Candy to Increase Restaurant Tipping. Journal of Applied Social Psychology. 32(2), pp. 300-309.

Review of Economic Perspectives

Národohospodárský obzor; The Journal of Masaryk University

Journal Information


CiteScore 2016: 0.50

SCImago Journal Rank (SJR) 2016: 0.262
Source Normalized Impact per Paper (SNIP) 2016: 0.516

Metrics

All Time Past Year Past 30 Days
Abstract Views 0 0 0
Full Text Views 33 33 13
PDF Downloads 9 9 3