We’ve written before about why schools continue the practice of favoring legacy admissions – accepting the sons and daughters of wealthy alumni.
Now there is some empirical evidence of the economics that drive this practice. Slate Magazine recently ran an article about the puzzle of charitable giving in economics – if markets are driven by individuals rationally pursuing their own best interest, where does charity come from?
A new study by Jonathan Meer of Stanford and Harvey S. Rosen of Princeton shows that when it comes to donations to one’s alma mater, charity isn’t altruism. Alumni with kids are 13 percent more likely to donate, and they are more and more likely to donate as their kid reaches age 14. At that point there’s a big split – for those parents who’s kids go on to apply to the school, donations continue to increase. The parents whose kids do not apply to the alma mater drop off giving.