Should Tipping Be Banned?

(Photo: Aaron Stidwell)

Season 4, Episode 5

The practice of tipping is one of the most irrational, un-economic behaviors we engage in. It’s not in our economic best-interest to tip; essentially we do it because it’s a social norm — a nicety. In this episode of Freakonomics Radio, Stephen Dubner looks at why we tip, what kinds of things can nudge tips upward, and what’s wrong with tipping overall. In the end, we wonder whether or not the practice of tipping should be eliminated altogether. Research shows that African American waiters make less in tips than people of other races, so tipping is a discriminatory practice. Later in the hour: if your parent has the gene for Huntington’s disease you have a 50% chance of getting it yourself. Huntington’s is a debilitating fatal disorder. People can do genetic testing to see if they will fall ill, yet only 5% of people choose to do so. Stephen Dubner talks to University of Chicago economist Emily Oster about her research on Huntington’s genetic testing, and the value of not knowing your fate.

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  1. Chad says:

    Hidden due to low comment rating. Click here to see.

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  2. J1 says:


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  3. Freak Tipper says:

    We should also ban education, since it’s clearly discriminatory: black students have worse results. You heard the man: even legitimate business practices, such as providing education, are illegal if they impact a protected class. Instead of hiding racism under the rug and banning things that remind us racism exists, how about seeking out it’s causes ?

    The corruption-tipping correlation segment is ridiculous. How exactly is tipping “leaking over” to corruption, especially in light of the fact that in US the correlation is reversed ?

    This was my first and last listen of your show, it’s pace is EXCRUCIATINGLY slow. Allot of small talk, pauses etc. and too little substance.

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    • Jonathan says:

      I accept your analogy about education…

      But I take issue with your assertion that the correlation of tipping-corruption is reversed in the U.S. Initially, the same thought came to my mind, as you did. But I would like you to to look at it at a slightly different angle. In most parts of the world (developed and otherwise) lobbying and campaign contributions are banned or extremely transparent with set limits on campaign contribution. But that doesn’t mean corruptions don’t exist in those countries. Far from it, when they surface they go gang busters. And those politicians who show any sign of impropriety, they are invariably punished. And I used to be all for legalizing lobbying in my country of birth, as in the U.S.

      But there is a dark side to lobbying. In the guise of “legality” lobbies by interest groups have pretty much paid off our politicians. And the PEOPLE have become indifferent, which is a very dangerous thing in a participatory democracy. In the end, it’s all about who is holding the most amount of “tips” (campaign contribution). We are not so naive as to believe the politicians when they say that their votes aren’t swayed by campaign money, are we?

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    • Preston Ross says:

      Ok, I can see your frustration, but some of it is in ignorance. The reason the corruption thig sounds rediculous is because of the word used. Correlation is not the same as Cusation. They were just making an observation that there could possibly be a connection. Then on banning education, one of the reasons they say that tipping should be banned is because the sub-minimum wage is set in stone while actual minimum wage keep rising. I was actualy suprided that it never came up. So please try to be reasonable before you blow up at people, it’s greatly apreciated.

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    • molly says:

      Levitt should stop going out to eat. I’m glad that he has the benefit of being upper class, and doesn’t find himself behind the counter or coming up to a table to take an order from someone like him. He needs to start preparing his own food so that he won’t feel so terribly “uncomfortable,” the poor dear!

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    • Dana says:

      Black students don’t have worse outcomes because education is provided for them. If you’re going to make analogies, you might check to make sure they’re watertight first.

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  4. Meagan, The Server says:

    I worked at a restaurant as a waitress for 3 years and found that African Americans and Hispanics typically tipped me, a white, blonde, female, less. However, taking into consideration it was “country cooking”, and I typically only had one or two ethnic customers in a week, it can’t be a very valid sampling.

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    • OS says:

      Definitely not a representative sample so you can’t generalize that this is true of many African Americans or Hispanics. But I would like to mention possible reasons for your results. One is poverty – these customers may not have much money. Second they may not know how tipping works – what is customary and why. Both of these were true of me when I was young. It probably has nothing to do with you being blonde. On the other hand perhaps you receive higher tips from others for being blonde and these customers don’t care about that. :)

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  5. SCW says:

    All of you who are so disturbed about the descriptor about tipping being discriminatory…take ten minutes to LISTEN TO THE BLOODY PODCAST!!!

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  6. Ian says:

    Hi Steven and Stephen,

    I love this episode and have listened to it several times, however I find it more entertaining than completely accurate. Having been a full-time professional in restaurant and bar service and management in Los Angeles, South Texas and San Francisco for over a decade, I tend to agree with the vast majority of the results you present, but one always sticks out as being incomplete:

    The idea that quality of service has little to no impact on the percentage of tips received is absolutely true. But what you fail to note, is that better service often yields higher sales. Of course the goal of any good server or bartender is to take and deliver your order accurately, but more importantly, he or she will strive to make you feel comfortable and gain your trust. Guests who are comfortable and feel well taken care of then are more likely to take the server’s suggested up-sell–an extra side of bacon, that slightly more expensive bottle of wine, etc. Most often, this will result in a guest having a much more pleasant, fulfilling experience, and even if such a satisfied guest leaves less than 20%, that guest likely spent much more than a table that had a less satisfactory experience and felt obligated to leave a big tip (for whatever reason). Additionally, the satisfied guest will more likely return for that experience and share that it with friends and family.
    Good service is a long-sell, but pays much higher dividends in both overall tips and sales, simply by practicing sincere hospitality.
    Thanks for your time, and keep up the good work!

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  7. Michelle says:

    Coming from a non-tipping country, I find it extremely uncomfortable to tip. I do not understand why the onus is not being put on the employer to adequately pay their employees. I’m also assuming that tips are ‘cash in hand’ and outside of the tax system therefore government is missing out on revenue.

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  8. sara butler says:

    as a server, i have said tipping is the worst for years. sound crazy? your waiter/waitress makes $2.63 an hour and then any tips they make. the irs taxes us based on our sales, hear that people? that means if you stiff me on a 100 dollar tab, i pay taxes on it as if you had tipped. guess what? that happens…alot. servers now more than anything else are salespeople, and our pay should be like any other salepeople…commission based. a waitress also has to give a large percentage of his/her tips to Pay the bartender, busboy and or host. so if you dont tip me, they still get up to a third of my SALES, NOT TIPS, SALES. That is why not tipping really can be considered stealing, legally being able to not pay for a service and yet taxing for money not earned is insane. make resturaunts PAY their employees a fair wage for their services, and like any other saleperson, pay commision.

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