To Tip or Not to Tip
By Amy Willis
Is tipping a relic of the past that has outlived its usefulness? Should restaurant servers work for tips or a living wage? This episode, EconTalk host Russ Roberts welcomed back political scientist Anthony Gill to discuss his recent piece on teaching about tipping.
1. Did your parents teach you to tip for service? If so, what was their rationale, and was there a guideline for how much to tip?
2. What are the norms regarding tipping in your area? For what service(s) do you tip, and how much? Have you ever found yourself in a situation where you “got it wrong?” What happened, and how did it influence your future behavior?
3. How does tipping allow for voluntary price discrimination, according to Gill, and on what grounds does Roberts disagree? With whom do you agree, and why?
4. Why would people tip in a place they never expect to visit again? (And why does Roberts jest that “only an economist would think this is a puzzle?”)
5. Special bonus question for all you econ teachers out there…Gill discusses tipping as a teaching tool in his political economy class. It’s a real-world example he uses to help his students understand concepts such as the principal-agent problem and price discrimination. What are your favorite real world illustrations of economics concepts, and how do you use them?