It’s a haphazard way of paying workers, and yet it keeps expanding. With federal tax policy shifting in a pro-tip direction, we revisit an episode from 2019 to find out why.
SOURCES:John List • , economist at the University of Chicago. Michael Lynn • , professor of consumer behavior and marketing at Cornell University’s School of Hotel Administration. Uri Gneezy • , economist at the University of California, San Diego’s Rady School of Management. Danny Meyer • , founder of Union Square Hospitality Group, and founder and chairman of the board of Shake Shack.
RESOURCES: • " How ‘No Tax on Tips’ Will Affect Waiters, Drivers and Diners • ," by Julia Moskin (New York Times, • 2025). • “ The Drivers of Social Preferences: Evidence from a Nationwide Tipping Field Experiment • ,” by Bharat Chandar, Uri Gneezy, John List, and Ian Muir ( The • National Bureau of Economic Research • , 2019). • “ Design and Analysis of Cluster-Randomized Field Experiments in Panel Data Settings • ,” by Bharat Chandar, Ali Hortacsu, John List, Ian Muir, and Jeffrey Wooldridge ( The National Bureau of Economic Research, • 2019) . • “ The Effects of Tipping on Consumers’ Satisfaction with Restaurants • ,” by Michael Lynn ( The Journal of Consumer Affairs • , 2018). • “ The Importance of Being Marginal: Gender Differences in Generosity • ,” Stefano DellaVigna, John List, Ulrike Malmendier, and Gautam Rao ( The • American Economic Review • , 2013). • “ Restaurant Tipping and Service Quality: A Tenuous Relationship • ,” by Michael Lynn ( The Cornell Hotel and Restaurant Administration Quarterly • , 2001).
EXTRAS: • “ The No-Tipping Point • ,” by Freakonomics Radio • (2016). • “ Should Tipping Be Banned? • ” by Freakonomics Radio • (2013).
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