Estimating the Local Economic Impacts of University Activity Using a Bill of Goods Approach (PDF)
Economic impact analyses for universities often produce impacts so large that they are viewed with suspicion. Using data collected from universities on actual expenditures as well as the local share of these expenditures to calibrate and regionalize custom economic impact multipliers will produce better results. We compare these economic impacts to those obtained using an “off-the-shelf” multiplier for universities from BEA’s Regional Input-Output Modeling System (RIMS II). We find that results are sensitive to initial assumptions about the study region and the scope of university economic activity. Finally, we use these results and our knowledge of the model to provide recommendations to improve the usefulness and reliability of multiplier-based estimates of the economic impact of universities.
JEL Code(s) E01 Published