Along with other kinds of affirmative action, colleges are likely to give preferential status to applicants whose parents and other close relatives have attended. The idea seems to be that having a relationship with a family increases donations. (For example, imagine that one of your descendents will become a billionaire and look for a big philanthropic outlet. If everyone in the family has gone to Family U., maybe this urge will turn into a new campus building, whereas if everyone in your family went to a different college, maybe this philanthropy would go to the poor...)
This intuition receives some support in a recent paper, by authors at Stanford and Princeton, who study an anonymous but selective university.
Family Bonding with Universities by Jonathan Meer, Stanford University, and Harvey S. Rosen, Princeton University
From the abstract:
"One justification offered for legacy admissions policies at universities is that that they bind entire families to the university. Proponents maintain that these policies have a number of benefits, including increased donations from members of these families. We use a rich set of data from an anonymous selective research institution to investigate which types of family members have the most important effect upon donative behavior. We find that the effects of attendance by members of the younger generation (children, children-in-law, nieces and nephews) are greater than the effects of attendance by older generations (parents, parents-in-law, aunts and uncles). "
That's just one data point. It's interesting, but nonetheless non-generalizable.
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