Do tourists tip more than local consumers? Evidence of taxi rides in New York City

Amir Borges Ferreira Neto, Adam Nowak and Amanda Ross ()
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Adam Nowak: West Virginia University, Department of Economics

No 17-14, Working Papers from Department of Economics, West Virginia University

Abstract: We revisit the mechanisms that drive tipping behavior by comparing tourists and locals in New York City. It is unlikely a tourist will tip as a way of enforcing repeated interactions since they are not from the area, while a local may tip as an enforcement mechanism. However, if people tip because of social norms, we should see both tourists and locals tipping similar amounts. We compare locals and tourists who are theatergoers to control for education and income, as these factors are likely to affect tipping behavior. Using data from the New York City and Limousine Commission on yellow taxis, we identify tourists as those trips leaving from or going to a hotel and theatergoers as trips where the drop off or pick up is near Broadway within 30 minutes of the beginning or end of a show. Our results suggest that tourists and theatergoers tip more than locals and non-theatergoers, and tourists who are theatergoers tip even more, between 0.51% and 0.67% more. These results are robust across specifications and suggest that social norms are likely driving tipping behavior.

Keywords: tipping behavior; social norms (search for similar items in EconPapers)
Pages: 32 pages
Date: 2017-07
New Economics Papers: this item is included in nep-tur and nep-ure
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