Megan McArdle explores the irrationalities of tipping, including why some countries have tipping and some do not, and why we tip some people (the person who carries our luggage to the hotel desk) but not others (the hotel desk clerk).

She lists plausible reasons for why and how people tip, to which I would like to add another possibility: Experience of depending on tips in the past. A friend of mine who always tips a lot once explained herself thus “I used to be a waitress and I know it’s demanding, so I want to help out the people who do such a hard job”.

I am also a big tipper, again based on being on the other end of the deal. When I was a paperboy, I charged customers $1.90 for two weeks of our local paper. My initial reaction when the occasional customer would give me two bucks and say “keep the change” was “Thanks a heap, big spender”, but I eventually realized that these people were doing me a solid: I paid the publisher $1.80 of the usual charge, so an extra dime effectively doubled my pay. The asymmetry of tipping was striking: To the customer, it was just a 5.26% increase in their bill, but to me it was 100% more pay.

This has stayed with me: Increasing the tip is a small thing for the giver and a big thing for the receiver. I have also worked in restaurants and know it can be very challenging; like my friend I identify with the staff and want to help them. Bumping up the tip is an extremely efficient way to do that, so I just about always do it.

[Cross-posted at The Reality-Based Community]

Keith Humphreys

Keith Humphreys is the Esther Ting Memorial Professor at Stanford University. @KeithNHumphreys