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
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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
2
What is an Economic Impact Study?
Effects on the
Labor Market
Creation of
new
knowledge
Expenditures
in the Local
Economy
Direct purchases
to local merchants
Conducting
pure & applied
research
Development of
new technologies
& industries
Indirect purchases
stimulating local
economy
(Stokes & Coomes, 1998)
3
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
4
What does the overall economic
impact actually mean?
Student Expenditures
Faculty & Staff Expenditures
Apply
Multiplier
to direct
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.
5
Methodology
-Student Survey
6
Methodology - cont.
-Faculty/Staff Survey
7
Methodology - cont.
-Business Survey
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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
8
Methodology - cont.
-Sample and Response Rates
Students
Faculty & Staff
Businesses


Sample
Responses
Response Rate
2580
1935
327
618
781
99
24.2
40.4
32.7
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.
9
Highlights of Findings
-Student Income

Mean monthly student income from all
sources after taxes:
 2003 - $1,380
**Increase of 35%

1999 - $1,020
10
Students – Mean Monthly Expenditures
Mean Monthly Expenditures Spent in Delaware
by Overall Student Respondents
1999
2003
Housing
Utilities
Telephone and Cable
Food and Beverage
Entertainment and Recreation
Services
Clothing
Books and Educational Supplies
Other Retail
Automobile
Medical and Dental
Other - 1
Other - 2
Other - 3
Total Mean Monthly Expenditures
$
244
39
37
126
43
27
44
38
45
114
14
9
3
1
782
$
271
38
41
139
46
30
39
105
42
114
49
61
88
0
1,063
Percent
Change
11
(3)
11
10
7
11
(11)
176
(7)
0
250
578
2833
(100)
36
11
Students – Full Time v. Part Time
Total Mean Monthly Student Expenditures
Spent in Delaware by Time Status
3,000
Dollars ($)
2,500
2,000
1999
2003
1,500
1,000
500
0
Full-Time
Part-Time
Time Status
12
Students – Overall Annual
Expenditures
Annual Expenditures Spent in Delaware
by Overall University Student Population
Housing
Utilities
Telephone and Cable
Food and Beverage
Entertainment and Recreation
Services
Clothing
Books and Educational Supplies
Other Retail
Automobile
Medical and Dental
Other - 1
Other - 2
Other - 3
Total Annual Expenditures
1999
2003
Expenditures
Expenditures
Per Year ($)
Per Year ($) *
44,506,332
49,547,608
7,113,717
6,947,635
6,748,911
7,496,133
22,982,778
25,413,718
7,843,329
8,410,295
4,924,881
5,484,975
8,025,732
7,130,468
6,931,314
19,197,413
8,208,135
7,678,965
20,793,942
20,842,905
2,553,642
8,958,793
1,641,627
11,152,783
547,209
16,089,260
182,403
0
143,003,952
194,350,948
* Annual Calculation – see next slide
Percent
Change
11
(2)
11
11
7
11
(11)
177
(6)
0
251
579
2840
(100)
36
13
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.
Mean Monthly
Expenditure for
each Category

X
# of Months in
each Term
=
Annual
Exp. for
each
Category
The terms (number of months) included:
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X
Student
Headcount for
each Term
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.
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Highlights of Findings
-Faculty & Staff Mean Monthly
Expenditures
Mean Monthly Expenditures Spent in Delaware
by Overall Faculty and Staff Respondents
Housing
Utilities
Telephone and Cable
Food and Beverage
Automobile
Medical and Dental
Services
Clothing
Other Retail
Entertainment and Recreation
Education and Tuition
Other - 1
Other - 2
Other - 3
Total Mean Monthly Expenditures
1999
2003
$
690
149
74
374
308
84
92
91
90
66
178
92
32
1
2,323
$
767
160
89
392
375
99
116
89
119
70
145
153
114
40
2,728
Percent
Change
11
7
20
5
22
18
26
(2)
32
6
(19)
66
256
3900
17
15
Faculty & Staff – Overall Annual
Expenditures
Annual Expenditures Spent in Delaware
by Overall University Faculty and Staff Population
Housing
Utilities
Telephone and Cable
Food and Beverage
Automobile
Medical and Dental
Services
Clothing
Other Retail
Entertainment and Recreation
Education and Tuition
Other - 1
Other - 2
Other - 3
Total Annual Expenditures
1999
2003
Expenditures Per Expenditures
Year ($)
Per Year ($) *
28,094,040
33,511,764
6,066,684
6,990,720
3,012,984
3,888,588
15,227,784
17,127,264
12,540,528
16,384,500
3,420,144
4,325,508
3,745,872
5,068,272
3,705,156
3,888,588
3,664,440
5,199,348
2,687,256
3,058,440
7,247,448
6,335,340
3,745,872
6,684,876
1,302,912
4,980,888
40,716
1,747,680
94,501,836
119,191,776
* Annual Calculation – see next slide
Percent
Change
19
15
29
12
31
26
35
5
42
14
(13)
78
282
4192
26
16
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.
Mean Monthly
Expenditure for
each Category

X
Employee
Headcount
X
12 Months
=
Annual
Exp. For
each
Category
The total annual expenditures were the sum of each
category’s above calculations.
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Highlights of Findings
-Business Responses
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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.
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University Economic Impact
Additional data collected from UD administration:

 University Purchasing
Conferences and
Events
 UD’s in-state
purchasing of products
 Local residents
and
services
spending at UD
 Approx. $95 million
events
purchased from in Cash flow to UD in
state vendors
addition to Tuition
 56% of total
& Fees
purchasing is within
the state of Delaware
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Overall Economic Impact
Annual Expenditures Spent in Delaware
by the University of Delaware and Its Community
Estimated Spending in
Percent
Percent
Overall Economic
Delaware Per Year
Change
Change
Impact
(Gathered from
since 1999
(Using Multiplier*) since 1999
Surveys and UD data)
Student Expenditures
194,350,948
36
349,831,706
29
Faculty and Staff Expenditures
119,191,776
26
214,545,197
19
University Purchases
94,893,449
51
170,808,208
43
Total Economic Impact
408,436,173
36
735,185,111
29
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.
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More about the Multiplier *

Output Multiplier
 Estimates the effect
that UD’s spending
has on the state in
terms of direct and
indirect purchases.
* Regional Input-Output Modeling System
(RIMS II). Regional Economic Analysis
Division, Bureau of Economic Analysis,
U.S. Department of Commerce, 2004.

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
21
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.
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22
Challenges of an Economic
Impact Study
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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.
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Benefits of an Economic
Impact Study
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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.
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Questions or Comments??
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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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