Salmon Smackdown

I am a huge fan of Felix Salmon; however, I have a couple of quibbles with a few recent posts on his blog. First, just a minor point in this excellent piece on Cooper Union’s move to establish tuition for its students—as Felix notes, it really is a tragedy that Cooper is moving toward this revenue model, and it is a function of, in large part, mistakes made by the board of trustees. However, in trying to make a point about distinguishing between Princeton and Cooper Union, Felix commits a fallacy that drives me crazy:

Cooper prides itself on being one of the most selective colleges in America, and picking students solely on merit. Princeton is also highly selective, but can’t claim that its admissions process is entirely merit-based: some 40% of legacies applying to Princeton end up being admitted, compared to just 9% of non-legacies. Alumni donate to Princeton in large part because they rationally believe that doing so will help their kids get in there; Cooper’s alumni, in contrast, would be horrified were Cooper to start admitting applicants on the basis of who their parents are. Besides, most kids don’t even want to attend Cooper, given that the only choices it offers are art, architecture, and engineering.

To be fair, Princeton may not have an entirely merit-based admissions system; however, the statistic that Felix cites does not, in any way, prove anything like this. Children of Princeton alumni are disproportionately likely to be financially well off, attend private schools or rigorous public schools, receive more intensive pre-K education/care, and have more exposure to literature, tutors, and expectations of academic success throughout their youth than the general population. As such, it would be ludicrous to expect the admissions rate for legacies to be equivalent to that of non-legacies. The correct comparison would be to see what the admissions rate for legacies looked like compared to non-legacy applicants controlling for household wealth, parental education, aptitude, leadership, volunteer efforts, and sporting ability. In other words, do applicants w/ 2200 SAT scores, 7-8 AP exam passes, strong extra-curricular activities, and parents who went to Harvard get in to Princeton at statistically significantly lower rates than applicants w/ 2200 SAT scores, 7-8 AP exam passes, strong extra-curricular activities, and parents who went to Princeton? I’m not aware of whether this information exists, but that is the question people should ask when addressing whether legacy status has any impact on admissions. My guess is that the impact exists but it is very slight (much much lower than 40% compared to 9%).

Why wouldn’t the admissions department release this information to dispel the notion that legacies unfairly impact the selection process? I think that undergraduate institutions that depend on an endowment to finance, in large part, expansion and financial aid love that people think that legacy status matters (even though it may not, or, if it does, it is very slight). Think about it—if alumni are donating in order to give their children a leg up in the admissions process, those donations are likely to significantly decrease once the student begins attending college regardless of whether the student was accepted (if the student is accepted, the job is done, and no more donations are needed. If the student is rejected, it seems obvious why donations wouldn’t be expected). However, donations will be very large in the years leading up to the acceptance decision if the parent thinks that will influence the acceptance decision.

From the perspective of the school, then, you want alumni to have an incentive to donate. But you also want them to donate as much money as possible. And it turns out that alumni tend to donate, in aggregate, a fixed percentage of their lifetime earnings (per Caroline Hoxby–no link unfortunately). That is, higher earning alumni donate more than lower earning alumni, but in roughly the same proportion to their expected lifetime earnings. (The proportion of lifetime earnings they donate tends to vary with background; but that isn’t really relevant here). For a school that wants to maximize endowment growth, then, maximizing the lifetime earnings potential of the student body seems like the smartest thing to do. And you do that by selecting the best students possible; sometimes at the expense of legacy students. Really, Princeton is in a prime position right now—everyone thinks that donations impact the admissions process (as I said above, I haven’t seen any proof of this and I highly doubt the effects are anything more than marginal, if they exist at all). Therefore, alumni with children donate money (the amount varying in proportion to their lifetime earnings). Then, Princeton selects a class that will maximize future lifetime earnings, regardless of legacy status; thus maximizing future donations to the school (so long as people continue to believe that legacy admissions matter).

Granted, I think the actual admissions departments are hardly basing their decisions off of future lifetime earning potentials for incoming students, but assuming that earnings at least correlate with ability , by selecting the strongest potential class regardless of legacy, Princeton is, indirectly, doing just that.


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