Just a little tip

In tonight’s Economics for Government class, I mentioned Ian Ayres’ work on racial bias in taxi tipping. Here’s his Freakonomics blog post on the topic.

So far as I’m aware, no-one has done anything on the economics of tipping in Australia. Enterprising economics honours students: the field awaits you.

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5 Responses to Just a little tip

  1. I suspect taxi tipping (as opposed to letting drivers keep the change) tends to be much rarer in Australia than the US. African drivers tend to have poor street knowledge so are probably least likely to receive extra. I almost always enjoy the chatty Indian students; I like hearing about their study experiences here and their charmingly upfront motivations in choosing Australia as a study destination (ie, permanent residence). They usually get extra. But the taxi driver gems are the handful of Greek and Italian oldtimers left on the road – fantastic street knowledge; often know even seemingly obscure destinations plus provide other information (such as what used to be on the site where my apartment building is now). They deserve tips.

  2. ChrisPer says:

    I agree about the old timers. Having travelled to places where tipping was usual, and got over my discomfort with the practice, I still want to do it occasionally after years back in Australia. But it has a huge negative – the strong social discomfort from not knowing whether or how much to tip, where it is not de rigeur.

  3. Kymbos says:

    Ha, my brother has worked in hospitality for years, and reckons he can pick the amount he will be tipped within minutes of you entering the restaurant. I was formulating a methodology to test this the other weekend. It would be a fascinating study, but I think restaurant tipping would be more interesting than taxi tipping, which I think is more ad-hoc.

  4. Yobbo says:

    Not sure where you live Andrew, but tipping doesn’t exist at all outside of Sydney, Melbourne and the Gold Coast.

  5. Richard Green says:

    Outside tourist areas I’ve only seen tipping of a sort where the change is dropped intoa jar rather than pocketed, as opposed to a conscientiously thought out payment.

    I wonder if there’s questions that can be drawn from Australian behaiviour and experiences that could inspire Americans to emulate our research, rather than the converse.

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