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How-To Guide

Methodological issues and practical issues are discussed in the Guide to Producing a Traditional Economic Impact Analysis for a University.

Three basic methodological questions must be answered in designing a university economic impact analysis:

1. Is the intent to measure overall economic activity or "incremental" activity? Regional economists prefer the latter approach, in which only funding from outside the region is included.

2. What is the geography of the study area? From an economic perspective, the study area should be the functional economic area, for example, the metropolitan area. Policy factors may cause the study area to be defined as either larger or smaller than the functional area, affecting the results of the impact analysis.

3. Is the focus on the direct economic effects or on the total impact of the university? The total impact considers secondary and indirect effects caused by the stimulus of the direct impacts.

The calculation of the direct economic impacts requires data on institutional expenditures and other measures, including employment, wages and salaries, and enrollment. Estimates must be made of faculty and staff expenditures, student spending, visitor expenditures, and taxes and other payments to regional governments.