Chay's theory certainly has shown an influence, particularly on private schools and those considered elite. But I think it's only part of the explanation, because for every Louis Vuitton buyer, there are at least ten others who say, "Look, I don't care about status; I just need something that can carry my stuff," and buy a generic, off-the-rack bag at Target. Louis Vuitton has no influence on that segment of the market.

So... state schools, the generic bag of the educational world. Why are they also so expensive?

- College is price sticky, because buyers see it as necessary for maintaining their way of life, or achieving a better one. They are therefore not equipped to make rational decisions on price.

- Arms-race spending to move up in USNews rankings.

- Easy credit to fuel the first two.