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Presented by: Allison M. Ohme Institutional Research Analyst University of Delaware

The Economic Impact of a University on its Community and State: Examining Trends Four Years Later. Presented by: Allison M. Ohme Institutional Research Analyst University of Delaware November 15, 2004 NEAIR 2004 ~ Portsmouth, NH. Session Outline. What is an Economic Impact Study?

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Presented by: Allison M. Ohme Institutional Research Analyst University of Delaware

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  1. The Economic Impact of a University on its Community and State: Examining Trends Four Years Later Presented by: Allison M. Ohme Institutional Research Analyst University of Delaware November 15, 2004 NEAIR 2004 ~ Portsmouth, NH

  2. Session Outline • What is an Economic Impact Study? • Background • 1999 University of Delaware (UD) Economic Impact Study • Methodology – Replicated for 2003 Study to examine trends • Highlights of Findings • Challenges and Benefits • Questions and Comments

  3. Effects on the Labor Market Expenditures in the Local Economy Development of new technologies & industries Indirect purchases stimulating local economy What is an Economic Impact Study? Direct purchases to local merchants Creation of new knowledge Visitors Students Conducting pure & applied research University and Personnel (Stokes & Coomes, 1998)

  4. Background • UD’s 1999 Economic Impact Study • Survey • Student Expenditures • Faculty and Staff Expenditures • Local Business – affected by UD? • University Expenditures • Use of Multiplier to estimate induced (indirect) economic impact – OVERALL IMPACT

  5. What does the overall economic impact actually mean? Student Expenditures Apply Multiplier to direct expenditures Faculty & Staff Expenditures University Expenditures OVERALL IMPACT - Estimates overall impact by accounting for the subsequent purchases made by merchants due to the profits from revenue of the direct purchases.

  6. Methodology -Student Survey

  7. Methodology - cont. -Faculty/Staff Survey

  8. Methodology - cont. -Business Survey • Number of students and alumni employed • Approximate percentage of business income attributed from the sales of products and services to the University of Delaware and its community • Impact on business if student enrollment at the University of Delaware declined • Ways the University of Delaware and its community influence business decisions

  9. Methodology - cont. -Sample and Response Rates • Student data set weighted to correctly represent overall student population by gender, time states, class level, residence status, and on/off campus status. • Faculty/Staff data set weighted to represent faculty and staff population by employment and time status.

  10. Highlights of Findings -Student Income • Mean monthly student income from all sources after taxes: • 2003 - $1,380 **Increase of 35% • 1999 - $1,020

  11. Students – Mean Monthly Expenditures

  12. Students – Full Time v. Part Time

  13. Students – Overall Annual Expenditures * Annual Calculation – see next slide

  14. Student Headcount for each Term # of Months in each Term Student Overall Annual Expenditures - Calculations • The annual expenditures for each student category were calculated by multiplying the mean monthly expenditure by the student headcount for each term by the number of months in each term. • The terms (number of months) included: • fall 2003 (4 months) • winter 2004 (1 month) • spring 2004 (4 months) • summer 1 and 2 2003 (1.5 months each) • The total annual expenditures were the sum of each category’s above calculations. Annual Exp. for each Category Mean Monthly Expenditure for each Category X X =

  15. Highlights of Findings -Faculty & Staff Mean Monthly Expenditures

  16. Faculty & Staff – Overall Annual Expenditures * Annual Calculation – see next slide

  17. Faculty & Staff Overall Annual Expenditures - Calculations • The annual expenditures for each faculty/staff category were calculated by multiplying the mean monthly expenditure by the employee headcount by 12 months. • The total annual expenditures were the sum of each category’s above calculations. Annual Exp. For each Category Mean Monthly Expenditure for each Category Employee Headcount 12 Months X X =

  18. Highlights of Findings -Business Responses • 38% of the business respondents employed 1 to 4 current University of Delaware students and almost half (49%) employed 1 to 4 University of Delaware alumni. • 26% of the business respondents indicated that for the part of their company that is located in the Newark area, 26 to 49% of their business income could be attributed to the University and its community. • Businesses buy products, schedule sales and promotions around University clientele.

  19. Conferences and Events Local residents spending at UD events Cash flow to UD in addition to Tuition & Fees University Purchasing UD’s in-state purchasing of products and services Approx. $95 million purchased from in-state vendors 56% of total purchasing is within the state of Delaware Additional data collected from UD administration: University Economic Impact

  20. Overall Economic Impact Use Output Multiplier of 1.8 to calculate the Overall Economic Impact. This estimates the induced effects after the direct purchases are made to in-state vendors. * Regional Input-Output Modeling System (RIMS II). Regional Economic Analysis Division, Bureau of Economic Analysis, U.S. Department of Commerce, 2004.

  21. Output Multiplier Estimates the effect that UD’s spending has on the state in terms of direct and indirect purchases. Employment Multiplier Number of jobs created by each additional $1 million of output. 20 jobs/$1 million 20 x 408.436 = direct output supports approx. 8,169 jobs More about the Multiplier * * Regional Input-Output Modeling System (RIMS II). Regional Economic Analysis Division, Bureau of Economic Analysis, U.S. Department of Commerce, 2004.

  22. Economic Impact in Context • These estimated expenditures are more than 4 times the state operating appropriations level ($100 million). • The estimated total economic impact of the University of Delaware is approximately $735 million, nearly a 29% increase compared to the results in the 1999 study.

  23. If done in-house: large data set, multiple mailings to gain response. Detailed and sometimes overwhelming survey. Location of the institution and commuters - the spending may either stay local to the institution, or occur where the students and employees live. Multipliers available for regions and states. Difficult to account for institution’s visitors. Challenges of an Economic Impact Study

  24. Understand how students and employees spend money locally. Examine institutional impact on local businesses. Provide government and public officials with an estimate of the economic value an institution adds to the region/state. Create opportunity for institution to discuss local relationships and shared goals. Benefits of an Economic Impact Study

  25. Questions or Comments??

  26. This presentation and the accompanying paper are located at: http://www.udel.edu/IR/presentations Thank you! Allison M. Ohme Institutional Research Analyst Office of Institutional Research & Planning University of Delaware 325 Hullihen Hall Newark, DE 19716 302-831-0239 aohme@udel.edu

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