TCS Daily


Harvard Via eBay

By James D. Miller - January 24, 2003 12:00 AM

Colleges should abolish legacy preferences and fill the saved slots with auction winners. Fairness dictates that prestigious schools admit those willing and able to pay the big bucks.

Defenders of college affirmative action programs inevitably point to the admission benefits given to the children of alumni. If it's unfair to give preferences to minorities, isn't it also unfair to give them to legacies? Colleges, however, defend legacy advantages, explaining that they stimulate alumni contributions. After all, would you still contribute to your alma mater after they rejected your daughter?

Like all charities, colleges run on money, so they shouldn't be condemned, per se, for trading slots for alumni contributions. Legacy preferences, however, discriminate in favor of old, and thus mostly white, money. If your grandparents were rich enough to send one of your parents to a top school you benefit, while if your parents made it big, but only after foregoing a prestigious college education, then you miss out on legacy preferences. If colleges want to sell places, they should do so openly and allow everyone to participate in the bidding.

By opening the bidding to all, colleges would increase the revenue they receive from selling spaces. Auctioning off legacy slots would be fairer to the rich non-legacies because they would now have a shot at "preferential" treatment. Auctions would even benefit the financially disadvantaged because it would give schools greater funds for financial aid.

Colleges are almost unique in not selling their services to all paying customers. Car dealers don't refuse to serve unskilled drivers. Toaster retailers rarely request their customers' SAT scores. Why do colleges care so much about their potential customers' abilities? It can't be because they strive for equality since the intellectually gifted are the most blessed in our society. If schools like Harvard really cared about equality they would exclusively admit the dimwitted.

Prestigious colleges care about student quality because there are positive spillover effects to being a smart student. Intelligent students help their classmates learn more, allow professors to teach classes at higher levels, and make for more profitable lifelong friends. Thus, while you probably don't care about the intelligence of the people buying your brand of toaster, you should desire to attend a college populated by smart students.

Students can thus be seen as bringing two virtues to their college: money and talent. When colleges admit legacy preferences they sacrifice talent for money, but do so in an inefficient manner since they restrict the pool of students who can bid for slots.

Colleges could go beyond even auctioning off a few spaces and instead accept everyone willing to pay. Of course, because of intellectual spillover effects colleges should charge the smarter students less. The extremely bright could pay negative prices and get paid to attend while those with low test scores would have to pay a lot to make up for lowering their schools' average IQ. Colleges should consequently never reject anyone; rather, they should set tuition prices based upon ability. To some extent colleges already do this when they give merit-based financial aid.

Making tuition entirely dependent upon ability would greatly motivate high school students to study harder as higher test scores would translate into reduced student loans. Furthermore, the existence of student loans would allow even economically disadvantaged students to buy their way into a top school. Colleges should welcome poor students who buy their way in, for what better signal could you send to a college that you will be a devoted student than that you're willing to go into immense debt just to be admitted?

James D. Miller is an assistant professor of economics at Smith College.
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