Wednesday, October 23, 2019

Men tip 12 pct more if their driver is a woman, but that’s entirely because they give more money to the youngest ones; the premium payed shrinks as the women get older


The Drivers of Social Preferences: Evidence from a Nationwide Tipping Field Experiment. Bharat Chandar, Uri Gneezy, John A. List, Ian Muir. NBER Working Paper No. 26380, October 2019. https://www.nber.org/papers/w26380.pdf

Abstract: Even though social preferences affect nearly every facet of life, there exist many open questions on the economics of social preferences in markets. We leverage a unique opportunity to generate a large data set to inform the who’s, what’s, where’s, and when’s of social preferences through the lens of a nationwide tipping field experiment on the Uber platform. Our field experiment generates data from more than 40 million trips, allowing an exploration of social preferences in the ride sharing market using big data. Combining experimental and natural variation in the data, we are able to establish tipping facts as well as provide insights into the underlying motives for tipping. Interestingly, even though tips are made privately, and without external social benefits or pressure, more than 15% of trips are tipped. Yet, nearly 60% of people never tip, and only 1% of people always tip. Overall, the demand-side explains much more of the observed tipping variation than the supply-side.

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Washington Post: Men tip 12 percent more if their driver is a woman, but that’s entirely because they give more money to the youngest female drivers. The premium men pay to women behind the wheel shrinks as the women get older. By the time the drivers are age 65, it has virtually vanished. Women also tip other women more, but they don’t significantly change their tips based on the driver’s age.

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