Guidelines on How to Prepare an Economic Impact Study of an American College or University Using Integrated Postsecondary Education Data System (IPEDS) Survey Data


 

Dr. Thomas W. MacFarland

P.O. Box 273404 Boca Raton, Florida 33427

E-Mail: t_macfarland@hotmail.com Web: http://www.nyx.net/~tmacfarl

 

 

 


This paper is prepared as a response by THE PRINCIPAL RESEARCHER to an economic impact study Request for Proposal (RFP) by YOUR COLLEGE OR UNIVERSITY (Anytown, USA). Integrated Postsecondary Education Data System (IPEDS) survey data, which are mandated by the United States Department of Education, are used as a primary resource for this methodology.

 

 

Original: March 1997

Revised: March 1999

 

 

EXECUTIVE SUMMARY

THE PRINCIPAL RESEARCHER proposes to prepare an economic impact study for YOUR COLLEGE OR UNIVERSITY (Anytown, USA). The final report will be comprehensive in scope, methodology, and scholarly presentation, yet written for the lay audience.

The economic impact study will be based on YOUR COLLEGE OR UNIVERSITY's annual impact on the local economy, and it will be based on the infusion of money into the local economy gained from:

To offer a broad understanding of how YOUR COLLEGE OR UNIVERSITY impacts the local and state economy, THE PRINCIPAL RESEARCHER proposes the use of three multipliers for this economic impact study, ranging from a conservative 1.8, to a median 2.4, to a liberal 3.0 multiplier. By using a range of multipliers, YOUR COLLEGE OR UNIVERSITY will be able to focus on economic impact exclusively on the local service area, or expand the scope of the service area to include economic impact throughout the state.

In addition to direct spending and the ripple effect of secondary spending in the local service area, the proposed economic impact study will also examine other related issues, such as:

As proposed, involvement in the economic impact study will begin in June 1999 and the report will be completed within four months, by the end of September 1999. Whenever possible, the report will be based on the use of extant data, survey data gained from YOUR COLLEGE OR UNIVERSITY students and alumni, and feedback from local employers.

Accompanying the final report, THE PRINCIPAL RESEARCHER will also prepare a press kit for local and state media, which will include:

These tools, supplementing the formal economic impact study, will enhance public understanding of YOUR COLLEGE OR UNIVERSITY's impact on the local and State economy.

 

 

TABLE OF CONTENTS

EXECUTIVE SUMMARY

SECTION I - PURPOSE

Background on the History of Economic Impact Studies in Higher Education

Role of an Economic Impact Study in Institutional Management 

Institutional Advancement Through Use of an Economic Impact Study

Support Services Offered by THE PRINCIPAL RESEARCHER

SECTION II - METHODOLOGY 

Local, State-Wide, and Total Expenditures 

Integrated Postsecondary Education Data System (IPEDS) Surveys

Expenditure File

Spending by Out-of-Area Students

Definition of Local Service Area 

Yearly Expenditures by Students

Permanent Residence File

Spending by Resident Students

Spending by Visitors

Visitors to the Institution

Visitors to Students

Economic Contributions from Local Alumni

Primary Data Resource

Secondary Data Resource

YOUR COLLEGE OR UNIVERSITY and Local Employers

Selection of a Multiplier

Jobs Generated as a Result of YOUR COLLEGE OR UNIVERSITY

SECTION III - TIMELINE

Data

RFP Process

YOUR COLLEGE OR UNIVERSITY Expenditures

Definition of Local Service Area

Yearly Expenditures by Students

Spending by Resident Students

Permanent Residence File

Spending by Visitors to YOUR COLLEGE OR UNIVERSITY

Spending by Visitors to Students

Economic Contributions from Local Alumni

YOUR COLLEGE OR UNIVERSITY and Local Employers

Reporting

Initial Summary

Draft Economic Impact Study

Final Economic Impact Study

SECTION IV - COST

Direct Costs

Variable Costs

SECTION V - FINAL PRODUCTS

REFERENCES

ATTACHMENT A: Sample Expenditure File

ATTACHMENT B: Sample Permanent Residence

ATTACHMENT C: Sample Survey Questions Used to Determine Spending by Resident Students

ATTACHMENT D: Sample Questions Used to Determine Economic Contributions by Local Alumni

 

 

 

SECTION I - PURPOSE

Background on the History of Economic Impact Studies in Higher Education

America's institutions of higher education are widely known for their commitment to teaching, research, and involvement in local communities. These educational institutions are also known for their impact on local labor markets, by increasing both the skills and earning opportunities of local workers in addition to the general level of human capital which results in increased local productivity (Beeson and Montgomery, 1993). Bleaney, et al. (1992) also discussed the ability of educational institutions to induce migration into a region, thereby attracting, and not only training or retraining, skilled labor.

During the 1960s, higher education had unprecedented growth and concomitant funding by local and state governments. However, as enrollments leveled and public funding became highly accountable, higher education found it useful to communicate the many contributions of an institution to a local community, including the impact of higher education on local and state economies. Accordingly, an economic impact study was viewed as a useful communication tool.

Although a few economic impact studies from the mid- to late 1960s are found in the literature, most institutions simply did not have the expertise needed to prepare this extensive undertaking. Accordingly, the American Council on Education's Commission on Administrative Affairs, from 1966 to 1968, engaged in discussions and prototyping of a model economic impact study, using methodologies feasible for most institutions (Caffrey and Isaacs; 1971, p. xi). By 1971 the model was in final form and Caffrey and Isaacs' text Estimating the Impact of a College or University on the Local Economy (1971) has been widely accepted by the higher education community as the de facto model to use when preparing an economic impact study.

While Caffrey and Isaacs (1971) still remains a useful model for an economic impact study, their model is known to be very demanding in terms of data collection. There has also been discussion that this model is too focused on direct expenditures, and that the model is therefore too conservative in assessing an institution's total economic impact on a specific service area. Bluestone (1993) offered a widely cited report on the long-term economic impact of a university on a regional area, going far beyond the standard deterministic input-output model presented by Caffrey and Isaacs (1971). Due to this broader view, Bluestone's (1993) approach toward an economic impact study is gaining increased acceptance, although Brown and Heaney (1997) cautioned that traditional models currently provide more reliable measures than newer approaches to this endeavor.

 

Role of an Economic Impact Study in Institutional Management

Regardless of the selected methodologies, an economic impact study can serve a variety of useful services. Initially, an economic impact study can be used to identify an institution's contribution to a regional and state economy. However, when prepared within the vision of educational accountability, an economic impact study can also be a useful planning tool that links budgeting and financing to measures of institutional effectiveness used to support professional and regional accreditation. Serving as a pervasive tool in institutional planning and governance, an economic impact study can be used:

  • The amount and location of economic activity by the institution, employees and students.
  • Types of products and services purchased.

 

Institutional Advancement Through Use of an Economic Impact Study

An economic impact study can be used as more than a management tool. An educational institution can use an economic impact study to educate the public, students and parents, alumni, business leaders, legislators, and the press on a variety of key issues affecting the fiscal health of the institution. Serving as an institutional advancement tool, an economic impact study can also be used:

 

Support Services Offered by THE PRINCIPAL RESEARCHER

An economic impact study, when judiciously prepared, presents a highly positive image of an educational institution to employees, students, alumni, members of the community, business leaders, and legislators. Perhaps even more important, most institutions have a far greater economic impact than most would imagine, but expertise in this complex area is needed to fully determine the impact.

THE PRINCIPAL RESEARCHER proposes to prepare an economic impact study for YOUR COLLEGE OR UNIVERSITY. Various methodologies and data resources on how this study can be attempted are possible. As can be anticipated, the complexity of each selected methodology and data resource affects the final cost of the completed study. Whenever possible, it is always best to use extant data, and it is often possible to identify more sources of useful extant data than may be obvious to those with limited experience in this area.

 

SECTION II - METHODOLOGY

Local, State-Wide, and Total Expenditures

Integrated Postsecondary Education Data System (IPEDS) Surveys

YOUR COLLEGE OR UNIVERSITY will provide photocopies of IPEDS surveys for the last five years (1994 to 1998) to THE PRINCIPAL RESEARCHER:

The data gained from this five-year history not only provide a rich sense of knowledge about YOUR COLLEGE OR UNIVERSITY, but they are in the public domain and therefore the use of this resource should alleviate any unnecessary concerns about public identification of sensitive information. The usefulness of this public resource has been clearly established over the last thirty years: Andrew, et al. (1980), Andrew, et al. (1981), Employment in Illinois Higher Education, Fall 1993 (1995), Lunney, (1979), and McCoy (1982).

Expenditure File

YOUR COLLEGE OR UNIVERSITY will also provide an electronic copy of an expenditure file, in ASCII format, of all disbursements for the last fiscal year, July 1997 to June 1998. The file will be in FIXED format, using the following scheme:

Columns 01 to 35 Vendor Name
Columns 36 to 40 Vendor Five-Digit Zip Code
Columns 41 to 51 Product or Service
Columns 52 to 58 Cost of Product or Service (including all leading zeros)
Columns 60 to 63 Date of Purchase (Month-Year)

THE PRINCIPAL RESEARCHER will provide guidelines to budget officers and information systems programmers needed to generate this file. This expenditure file (see the sample provided in Attachment A) and the data gained from IPEDS surveys should be quite sufficient to determine YOUR COLLEGE OR UNIVERSITY's direct economic contributions in the local service area and throughout the state. If the Fiscal Year 1997-98 expenditure file cannot be generated, then IPEDS data, along with ample references in the literature (Gran, Mulkey, and Malecki, 1995; MacFarland, 1995; MacFarland, 1996; Weitzman, 1991) will provide a sense of local and state-wide percentage spending patterns.

 

Spending by Out-of-Area Students

Definition of Local Service Area

YOUR COLLEGE OR UNIVERSITY will declare the composition of the local service area. An immediate thought for this declaration is for YOUR COLLEGE OR UNIVERSITY to include the local county and any other counties that provide direct tax-based fiscal support. Students from all other counties as well as students from other states and nations are therefore considered out-of-area students. Any spending for tuition, books, meals and housing, and other cost-of- living expenses by these students can be included in the overall economic impact study as new (i.e., imported) sources of money to the local service area.

Yearly Expenditures by Students

YOUR COLLEGE OR UNIVERSITY's Office of Financial Aid most likely prepares annual student expense budgets to support financial aid awards. These statistics will serve as the baseline datum for annual student cost-of-living expenditures in the local service area.

Permanent Residence File

YOUR COLLEGE OR UNIVERSITY will provide an electronic copy of a permanent residence file, in ASCII format, of all Fall Term 1998 students. The file (see the sample file included in Attachment B) will be in FIXED format, using the following scheme:

Columns 01 to 09 Student Social Security Number Columns 11 to 15 Student Permanent Residence Five-Digit Zip Code

THE PRINCIPAL RESEARCHER will provide guidelines to information systems programmers needed to generate this file. By knowing the estimated yearly cost-of-living expenditures students incur and the number of out-of-area students temporarily residing in the local service area, it is possible to determine the yearly amount of local spending by out-of-area students.

 

Spending by Resident Students

Although spending by out-of-area students should be included in the economic impact study since this spending represents new money imported into the local service area strictly due to the presence of the College, a question remains, however, on how to incorporate spending by students who are resident to YOUR COLLEGE OR UNIVERSITY's local service area. Most economic impact studies are in error in how this issue is addressed:

To resolve this problem, it is best to recall that if YOUR COLLEGE OR UNIVERSITY did not exist, then it is reasonable to think that many students would leave the local service area to pursue their education at institutions in other areas. In turn, this induced migration would reduce spending in YOUR COLLEGE OR UNIVERSITY's local service area.

A simple survey process will resolve this issue and support the calculation of an acceptable ratio of: (1) resident students who would remain in the local service area, and (2) their counterparts who would leave the local service area to pursue their educational goals at another location. THE PRINCIPAL RESEARCHER will develop a brief survey that addresses the question:

What would you have done had you not attended YOUR COLLEGE OR UNIVERSITY?

By listing a variety of potential reactions to this simple question, it should be fairly easy to determine the potential percentage of students who would remain in the local service area and those who would leave, and concomitantly take their money away from YOUR COLLEGE OR UNIVERSITY's local service area. Spending by students who remain in the local service area (but might have left the local service area if YOUR COLLEGE OR UNIVERSITY did not exist) can then included in the economic impact study.

THE PRINCIPAL RESEARCHER will prepare the camera-ready survey and later conduct computer-mediated analysis of survey responses. YOUR COLLEGE OR UNIVERSITY will photocopy the survey, select the sample using local resources, generate mailing labels, distribute the survey to invited participants by U.S. mail, collect completed surveys and surveys returned as undelivered by the U.S. Postal Service, and return all completed surveys and undelivered surveys to THE PRINCIPAL RESEARCHER. If there were a Fall Term enrollment of approximately 20,000 students at YOUR COLLEGE OR UNIVERSITY, random selection procedures would be necessary to select an invited sample of approximately 260 Fall Term students (Isaac and Michael, 1981, p. 193) to obtain a representative sample of all students.

By knowing the estimated yearly cost-of-living expenses students incur and the number of local students who would have left the local service area to pursue their educational goals, but instead remain in the local service area thereby spending money in the local service area, it is possible to determine local spending by this other group of students.

 

Spending by Visitors

Perhaps one of the most difficult estimates in any economic impact study involves spending by visitors who come to see the institution and/or resident students. Based on the literature, daily expenditures range from $90 per visitor-day (Morrell, 1995) to $106 per visitor-day (Hogan, 1992). However, the number of visitor-days is always difficult to determine since many campus- based activities do not include the use of tickets or some other tracking activity. An estimate of the number of visitor-days is also difficult to determine since adult students residing off-campus would have no reason to track this activity and report it to an institution.

Visitors to the Institution

YOUR COLLEGE OR UNIVERSITY will be responsible for providing an estimate of the number of out-of-area visitors to the institution and the total expenditures of these visitors in the local service area. Attendance records for sporting events, plays, concerts, other cultural activities, and campus-based conferences are all first sources of information for this statistic. Activities hosted by individual departments are also useful in determining a collective estimate. THE PRINCIPAL RESEARCHER can offer guidance on this issue, but only those with intimate knowledge of the institution can offer the final estimate for YOUR COLLEGE OR UNIVERSITY.

Visitors to Students

To determine spending patterns by visitors to students, THE PRINCIPAL RESEARCHER will conduct a telephone-based interview of 50 identified students, eliciting information about visitors and spending activities during the visit. YOUR COLLEGE OR UNIVERSITY will use a random selection process to generate this list of 50 students, identifying students by name and phone number. THE PRINCIPAL RESEARCHER will then call these students and ask if they are willing to participate in the telephone survey and the best time of day to call for a 15-minute telephone call if they are not available at the time of the first call. Dialogue will be as unobtrusive and brief as possible, focusing exclusively on the nature of spending by out-of-area visitors.

 

Economic Contributions from Local Alumni

Primary Data Resource

Bluestone (1993) gave detailed attention to the long-term impact of alumni on a local service area's economy, emphasizing the increased earnings of graduates and subsequent enhanced tax base gained from these highly skilled workers. To gain a sense of this contribution, THE PRINCIPAL RESEARCHER will develop a brief alumni survey that addresses the following issues:

Graduation year from YOUR COLLEGE OR UNIVERSITY.

Permanent residence at time of graduation from YOUR COLLEGE OR UNIVERSITY.

Permanent residence now.

What would you have done had you not attended YOUR COLLEGE OR UNIVERSITY?

If you are employed, how closely related is your current job to your program of study at YOUR COLLEGE OR UNIVERSITY?

What is the salary or annual income of your current job?

Have you applied to a four-year college or university since graduation from YOUR COLLEGE OR UNIVERSITY?

If you are a student, how closely related is your current academic program to your program of study at YOUR COLLEGE OR UNIVERSITY?

THE PRINCIPAL RESEARCHER will prepare the camera-ready survey and later conduct computer-mediated analysis of survey responses. YOUR COLLEGE OR UNIVERSITY will photocopy the survey, select the sample using local resources, generate mailing labels, distribute the survey to invited participants by U.S. mail, collect completed surveys and surveys returned as undelivered by the U.S. Postal Service, and return all completed surveys and undelivered surveys to THE PRINCIPAL RESEARCHER

To offer a broad understanding of evolving alumni contributions, the invited sample should include graduates from the last 10 years, 1988 to 1998. YOUR COLLEGE OR UNIVERSITY will identify the number of graduates for each year so that THE PRINCIPAL RESEARCHER can declare the required size of the invited sample for each graduation year (Isaac and Michael, 1981, p. 193).

Secondary Data Resource

In addition to analysis of results from the alumni survey, statistics maintained by the United States Department of Labor and the Bureau of the Census will also offer an in-depth picture of enhanced economic activity in the local service area because of YOUR COLLEGE OR UNIVERSITY's presence in Anytown, USA. If random selection processes are used, such that the invited alumni sample is a reflection of the population, it is more than reasonable to think that the alumni survey and secondary resources will offer useful statistics on how YOUR COLLEGE OR UNIVERSITY alumni have been integrated into local businesses. In turn, this information will be used to support the long-term economic contributions of YOUR COLLEGE OR UNIVERSITY alumni.

 

YOUR COLLEGE OR UNIVERSITY and Local Employers

The Anytown, USA Chamber of Commerce, Economic Development Council, and similar groups should have extant public data on public sector and private sector employees in the local service area. In most cases, data are organized in terms of ranking of local businesses by number of full-time employees. YOUR COLLEGE OR UNIVERSITY, serving as a local resource with day-to-day knowledge of the local business community, will help THE PRINCIPAL RESEARCHER obtain these listings to include in the final economic impact study. Rank order listings, although they depend on ordinal data, are easily-understood by the public and they should be presented if at all possible.

If YOUR COLLEGE OR UNIVERSITY has engaged in analyses of local business satisfaction with the College, it may be useful to incorporate appropriate findings into the final economic impact study. Otherwise, information from the alumni survey will help assess how alumni have been integrated into local businesses.

Even so, it will be useful to directly contact Human Resource directors of leading local companies to gain a sense of how YOUR COLLEGE OR UNIVERSITY is viewed by this constituency and, in turn, to determine the extent to which it attracts resources into the local service area. To gain this information, THE PRINCIPAL RESEARCHER will conduct a telephone-based interview of up to 20 local Human Resource directors, eliciting information on how these managers view the role of YOUR COLLEGE OR UNIVERSITY in attracting resources into the local service area. YOUR COLLEGE OR UNIVERSITY will use the most appropriate selection process to generate this list of 20 businesses, identifying Human Resource directors by name, company, and phone number. THE PRINCIPAL RESEARCHER will then call these directors, asking if they are willing to participate in the telephone survey and the best time of day to call for a brief telephone call if they are not available at the time of the first call. Dialogue will be as unobtrusive and concise as possible, focusing exclusively on the role of YOUR COLLEGE OR UNIVERSITY as an entity that attracts outside resources into the local service area and as a service unit for local economic development.

 

Selection of a Multiplier

Taylor (1990, p. 40) offered an exceptionally lucid discussion of an economic multiplier and the impact of a multiplier on a local economy:

The method of estimating the total economic impact of [any higher education institution] is essentially an application of a multiplier model in which direct spending, that is money that flows into the area from other areas, is subsequently respent within the area by the initial recipients. The respending process continues in successive rounds, from each of which there are leakages into the 'external' economy until the amount respent is approximately zero. [ ] The ratio between the initial injection and the total spending is termed the value of the multiplier.

If it is assumed that the proposed economic impact study is to be restricted in focus to the local service area and any other local counties in the state that offer tax-based support to YOUR COLLEGE OR UNIVERSITY, then a conservative multiplier should be used, possibly ranging from 1.8 to 2.2. If, however, the local service area is expanded to include the entire state, which could be arguably valid, since YOUR COLLEGE OR UNIVERSITY may likely receive state support, then a more expanded multiplier should be selected, possibly ranging from 2.4 to 3.0.

Posey (1983), Goldstein (1989-1990), Elliott, Levin, and Meisel (1988), and Leslie and Brinkman (1993) are all useful readings on how YOUR COLLEGE OR UNIVERSITY should select a multiplier. Unless directed otherwise, THE PRINCIPAL RESEARCHER will calculate the final estimate of economic impact using three multipliers, ranging from a conservative 1.8, to a median 2.4, to a liberal 3.0 multiplier.

Jobs Generated as a Result of YOUR COLLEGE OR UNIVERSITY

The most current IPEDS Fall Staff Survey (IPEDS-S) will provide useful information on the number of full-time employees at YOUR COLLEGE OR UNIVERSITY. If possible, the Human Resources Department will provide an update to the statistics reported in this required federal survey.

Using Caffrey and Isaacs' (1971, p. 33) model of applying a multiplier of 0.00009 against the sum of all identified expenditures, this process will be used to estimate the number of spin-off jobs created because of YOUR COLLEGE OR UNIVERSITY's presence. Because of interconnected markets, it would be best to declare this job-creation statistic on a state-wide basis instead of restricting it to the local service area only.

 

SECTION III - TIMELINE

In the RFP for this economic impact study, it was identified that proposals must be submitted to YOUR COLLEGE OR UNIVERSITY by April 30, 1999. Assuming that YOUR COLLEGE OR UNIVERSITY will need a month to select the consultant asked to prepare the study, the following timeline is based on a starting date of June 1, 1999. To allow for an orderly exchange of data and formative communication, it is anticipated that the economic impact study will require four months of focused attention for completion of the final report and accompanying materials. The timeline is presented in chronological order.

Data

RFP Process

04/30/99 Deadline for completion of RFPs to YOUR COLLEGE OR UNIVERSITY.

06/01/99 Notification of acceptance by YOUR COLLEGE OR UNIVERSITY.

YOUR COLLEGE OR UNIVERSITY provides copies of the catalog, Fact Book, and any other relevant background information.

YOUR COLLEGE OR UNIVERSITY Expenditures

06/07/99

YOUR COLLEGE OR UNIVERSITY provides photocopies of all requested 1994 to 1998 IPEDS surveys to THE PRINCIPAL RESEARCHER.

Analysis of the data from these surveys will be completed by 07/07/99. Data analysis and preparation for inclusion in the final economic impact study will require approximately 15 to 20 hours.

06/07/99

YOUR COLLEGE OR UNIVERSITY provides the July 1997 to June 1998 expenditure file, in ASCII format, to THE PRINCIPAL RESEARCHER.

Analysis of the data in this file will be completed by 07/15/99. Data analysis and preparation for inclusion in the final economic impact study will require approximately 20 to 30 hours.

If the data file cannot be prepared in the desired format, sampling techniques may be needed to determine the percentage of expenditures in the local service area, throughout the state, and other areas. Of course, if computer-mediated analyses cannot be used to obtain this estimate, then other methodologies will increase time on task requirements.

Definition of Local Service Area

06/07/99

YOUR COLLEGE OR UNIVERSITY declares the composition of the local service area.

THE PRINCIPAL RESEARCHER will use this declaration throughout the composition of the economic impact study.

Yearly Expenditures by Students

06/07/99

YOUR COLLEGE OR UNIVERSITY's Office of Financial Aid provides photocopies of annual student expense budgets to THE PRINCIPAL RESEARCHER.

THE PRINCIPAL RESEARCHER will use this budget information throughout the composition of the economic impact study.

Data analysis and preparation for inclusion in the final economic impact study will require approximately 5 hours.

Spending by Resident Students

06/15/99

THE PRINCIPAL RESEARCHER provides a suggested cover letter and a camera-ready photocopy of the survey that addresses the question of: What would you have done had you not attended YOUR COLLEGE OR UNIVERSITY?

YOUR COLLEGE OR UNIVERSITY will photocopy the survey, select the sample (N 289 Fall Term 1998 students), generate mailing labels, distribute the survey to invited participants by U.S. mail, and collect completed surveys and surveys returned as undelivered by the U.S. Postal Service.

Surveys are accepted by YOUR COLLEGE OR UNIVERSITY until 07/15/99. YOUR COLLEGE OR UNIVERSITY sends all completed and undelivered surveys to THE PRINCIPAL RESEARCHER by 07/21/99.

Analysis of the data in this file will be completed by 08/21/99. Preparation of the cover letter, survey, data analysis, and preparation for inclusion in the final economic impact study will require approximately 20 to 25 hours.

Permanent Residence File

06/15/99

YOUR COLLEGE OR UNIVERSITY provides the Fall Term 1998 permanent residence file, in ASCII format, to THE PRINCIPAL RESEARCHER.

Analysis of the data in this file should be completed by 07/21/99. Data analysis and preparation for inclusion in the final economic impact study will require approximately 10 to 15 hours.

If the data file cannot be prepared in the desired format, sampling techniques may be needed to determine the percentage of YOUR COLLEGE OR UNIVERSITY students who have permanent residence in the local service area, throughout the state, and other areas. Of course, if computer-mediated analyses cannot be used to obtain this estimate, then other methodologies will greatly increase time on task requirements.

Spending by Visitors to YOUR COLLEGE OR UNIVERSITY

06/15/99

Through communication with students, faculty, and administrators, YOUR COLLEGE OR UNIVERSITY provides an estimate of the number of visitors to the campus between July 1997 and June 1998 and an estimate of the amount of money these visitors spent in the declared local service area. Appropriate accompanying documentation, such as tracking of tickets at sporting and cultural events, will be included in the final economic impact study.

Spending by Visitors to Students

06/15/99

YOUR COLLEGE OR UNIVERSITY will provide THE PRINCIPAL RESEARCHER with a list of 50 students enrolled in one or more courses sometime between July 1997 to June 1998, identifying students by name and phone number.

THE PRINCIPAL RESEARCHER will immediately call these students, asking if they are willing to participate in the telephone survey and the best time of day to call for a 15-minute telephone call if they are not available at the time of the first call. Analysis of all visitor information statistics gained from this survey process will be completed by 08/15/99.

Preparation of the working script, time on task for telephone calls, data analysis, and preparation for inclusion in the final economic impact study will require approximately 25 to 40 hours. Like any telephone interview process, the information gained is very rich, but time on task is difficult to estimate, depending on the number of times it is necessary to call participants, as well as their willingness to immediately offer the requested information.

Economic Contributions from Local Alumni

06/15/99

THE PRINCIPAL RESEARCHER provides a suggested cover letter and a camera-ready photocopy of the survey that addresses a series of questions to alumni.

YOUR COLLEGE OR UNIVERSITY photocopies the survey, selects the sample (N is currently unknown, depending on the number of graduates from each of the last 10 graduating years), generates mailing labels, distributes the survey to invited participants by U.S. mail, and collects completed surveys and surveys returned as undelivered by the U.S. Postal Service.

Surveys are accepted by YOUR COLLEGE OR UNIVERSITY until 07/15/99. YOUR COLLEGE OR UNIVERSITY sends all completed and undelivered surveys to THE PRINCIPAL RESEARCHER by 07/21/99. Analysis of the data in this file will be completed by 08/15/99.

Preparation of the cover letter, survey, data analysis, and preparation for inclusion in the final economic impact study will require approximately 25 to 30 hours.

As needed, secondary sources of information gained from federal data will also be incorporated into the final economic impact study.

YOUR COLLEGE OR UNIVERSITY and Local Employers

06/15/99

THE PRINCIPAL RESEARCHER completes an audit of background information about the local service area using a variety of resources. To supplement this information, YOUR COLLEGE OR UNIVERSITY provides THE PRINCIPAL RESEARCHER with catalogs, brochures, and other materials from the local Chamber of Commerce, Economic Development Council, and similar groups likely to have extant public data on public sector and private sector employment in the local service area. If YOUR COLLEGE OR UNIVERSITY has engaged in analyses of local business satisfaction, this information will also be incorporated into the final economic impact study.

THE PRINCIPAL RESEARCHER will use this information throughout composition of the economic impact study.

06/15/99

YOUR COLLEGE OR UNIVERSITY will provide THE PRINCIPAL RESEARCHER with a list of 20 Human Resource directors from businesses in the local service area, identifying these directors by name, business, and phone number.

THE PRINCIPAL RESEARCHER will immediately call these individuals, asking if they are willing to participate in the telephone survey and the best time of day to call for a 15-minute telephone call if they are not available at the time of the first call. Analysis of all information gained from this telephone survey process will be completed by 08/15/99.

Preparation of the working script, time on task for telephone calls, data analysis, and preparation for inclusion in the final economic impact study will require approximately 15 to 25 hours. Like any telephone interview process, the information gained is very rich, but time on task is difficult to estimate, depending on the number of times it is necessary to call participants as well as their willingness to immediately offer the requested information.

 

Reporting

Initial Summary

09/01/99

THE PRINCIPAL RESEARCHER will complete all data analyses by 08/15/99. Within two weeks, YOUR COLLEGE OR UNIVERSITY will receive a two page initial summary of the College's economic impact on the declared local service area.

This two page summary is strictly a formative communication designed to give YOUR COLLEGE OR UNIVERSITY an advance organizer of project outcomes.

The emphasis of this initial summary is to identify the order of magnitude difference in economic impact on a local service when three different multipliers are used, ranging from a conservative 1.8, to a median 2.4, to a liberal 3.0 multiplier. This presentation will apprise YOUR COLLEGE OR UNIVERSITY of the content of the final report.

It is anticipated that the synthesis of various components of this activity into a unified summary will require 5 hours.

Draft Economic Impact Study

09/07/99

YOUR COLLEGE OR UNIVERSITY will receive the final economic impact study in draft form. The study will be scholarly in methodology, yet written for a lay audience with interest in the subject. It is anticipated that preparation of the draft report will require 20 hours.

09/15/99

YOUR COLLEGE OR UNIVERSITY will return the draft economic impact study to THE PRINCIPAL RESEARCHER, marking areas that may need attention. Telephone conversations will expedite this iterative process.

It is anticipated that telephone conversations with YOUR COLLEGE OR UNIVERSITY's director of Institutional Planning and Research, at this late stage of development, will require 3 to 5 hours of involvement.

Final Economic Impact Study

09/30/99

YOUR COLLEGE OR UNIVERSITY will receive the economic impact study in final form. THE PRINCIPAL RESEARCHER will also provide a press kit of salient outcomes of the study, allowing for easy use of outcomes for presentation to the media and public audiences.

Based on the frequency and extent of feedback to the draft report from YOUR COLLEGE OR UNIVERSITY, the preparation of the final economic impact study and the accompanying press kit will require an additional 15 to 20 hours.

It is reasonable to think that YOUR COLLEGE OR UNIVERSITY will offer the results of the economic impact study at a public press conference. If it is desired to have a consultant available to answer technical questions, THE PRINCIPAL RESEARCHER will later negotiate with YOUR COLLEGE OR UNIVERSITY on a fee to accommodate this request.

 

SECTION IV - COST

Direct Costs

THE PRINCIPAL RESEARCHER anticipates that the preparation of an economic impact study for YOUR COLLEGE OR UNIVERSITY will require anywhere from 178 to 240 hours of involvement. In compensation, THE PRINCIPAL RESEARCHER will require A NEGOTIATED FEE for this endeavor. A summary of anticipated time on task for each major component of the proposed economic impact study follows:

15 to 20 hours Analysis and Organizations of IPEDS Surveys

20 to 30 hours Analysis of the Expenditure File

5 hours Organization of Student Yearly Expenditures

10 to 15 hours Analysis of the Permanent Residence File

20 to 25 hours Survey of Resident Students

25 to 40 hours Telephone Interview of Students

25 to 30 hours Survey of Alumni

15 to 25 hours Telephone Interview of Human Resources Directors

5 hours Preparation of Initial Summary

20 hours Preparation of Draft Economic Impact Study

3 to 5 hours Telephone Consultations for Closure

15 to 20 hours Preparation of Final Economic Impact Study and Accompanying Press Kit

Variable Costs

Survey return will be highest if the letterhead and point of survey distribution indicates that YOUR COLLEGE OR UNIVERSITY initiated the survey. Accordingly, the methodology in this proposal places the task of survey distribution (sampling, generation of mailing labels, preparation of outgoing survey packages, organization of returned surveys) and the cost of survey distribution (survey photocopying and postage) on YOUR COLLEGE OR UNIVERSITY. As such, THE PRINCIPAL RESEARCHER will not require reimbursement for these direct survey- related costs if the proposed methodologies are followed.

If, however, YOUR COLLEGE OR UNIVERSITY cannot immediately accommodate the logistics of survey distribution, THE PRINCIPAL RESEARCHER could offer guidance for this task. Even so, to receive an acceptable percentage survey return, all surveys must be mailed on YOUR COLLEGE OR UNIVERSITY letterhead and have an Anytown, USA postmark. In all cases, YOUR COLLEGE OR UNIVERSITY is the only entity that is able to select the invited sample for all individuals (students, alumni, human resource directors) invited to participate in surveys and telephone interviews and in turn generate mailing labels.

YOUR COLLEGE OR UNIVERSITY will reimburse THE PRINCIPAL RESEARCHER for the cost of all telephone calls associated with interviews of students and human resource directors. Photocopies of all telephone statements will be used to verify the cost of these calls.

 

SECTION V - FINAL PRODUCTS

As planned, work on this endeavor will begin June 1, 1999, and the economic impact study for YOUR COLLEGE OR UNIVERSITY will be in final form by September 30, 1999. The final products will include:

  • Talking points that help organize presentations of the themes of an economic impact study for formal and informal speeches.
  • Tables and figures that can be used to support speeches and presentations to the media.

 

REFERENCES

Andrew, Loyd D., et al. (1980). Analysis of Uses of HEGIS Data. Blacksburg, Virginia: Virginia Polytechnic Institute and State University. ERIC ED 196347

Andrew, Loyd D., et al. (1981). Who Uses Higher Education General Information Survey (HEGIS) Data for What Purposes. Paper presented at the Joint Conference of the Southern Association for Institutional Research and the North Carolina Association for Institutional Research. ERIC ED 212224

Beeson, Patricia, and Edward Montgomery. (1993). "The Effects of Colleges and Universities on Local Labor Markets." The Review of Economics and Statistics, V75, N4; pp. 753-761.

Bleaney, Michael F., Martin R. Binks, David Greenaway V. Reed, and David K. Whynes. (1992). "What Does a University Add to Its Local Economy?" Applied Economics, V24; p. 305- 311.

Bluestone, Barry. (1993). UMASS/Boston: An Economic Impact Analysis. Boston: University of Massachusetts. ERIC ED 356733

Brown, Kenneth H., and Michael T. Heaney. (1997). "A Note on Measuring the Economic Impact of Institutions of Higher Education." Research in Higher Education, V38, N2; pp. 229-40.

Caffrey, John, and Herbert H. Isaacs. (1971). Estimating the Impact of a College or University on the Local Economy. Washington, D.C.: American Council on Education. ERIC ED 252100

Elliott, Donald S., Stanford L. Levin, and John B. Meisel. (1988). "Measuring the Economic Impact of Institutions of Higher Education." Research in Higher Education, V28, N1; pp. 17-33.

Employment in Illinois Higher Education, Fall 1993. (1995). Springfield, Illinois: Illinois State Board of Higher Education. ERIC ED 384334

Gran, Stephen M., David Mulkey, and Edward J. Malecki. (1995). The Economic Impact of the University of Florida on the State of Florida. Gainesville, Florida: The University of Florida.

Goldstein, Harvey A. (1989-90). "Estimating the Regional Economic Impact of Universities: An Application of Input-Output Analysis." Planning for Higher Education, V18, N1; pp. 51- 64.

Hogan, Timothy D. (1992). "New CBR Study Reveals Economic Impact of ASU." Arizona Business, V39, N5; pp.1-3.

Isaac, Stephen, and William B. Michael. (1981, 2nd ed.). Handbook in Research and Evaluation. San Diego, California: EdITS Publishers.

Leslie, Larry L., and Paul T. Brinkman. (1993). The Economic Value of Higher Education. Phoenix, Arizona: The Oryx Press (American Council on Education Series on Higher Education).

Lunney, Gerald H. (1979). About That Data Base That is Hiding in the Closet. Paper presented at the Annual Meeting of the Southern Association for Institutional Research. ERIC ED 192633

McCoy, Marilyn. (1982). The Utility of HEGIS Finance Data: A Researcher's Perspective. Boulder, Colorado: National Center for Higher Education Management Systems. ERIC ED 246808

MacFarland, Thomas W. The Impact of Independent Colleges and Universities of Florida on the State Economy: Fiscal Year 1995. Fort Lauderdale, Florida: Nova Southeastern University, 1996. (Research and Planning Report 96-16)

MacFarland, Thomas W. The Impact of Nova Southeastern University on the South Florida Economy. Fort Lauderdale, Florida: Nova Southeastern University, 1995. (Research and Planning Report 95-03)

Morrell, Louis R. (1995). "Measuring Economic Impact: A Plan for Institutional Self-Defense from Taxation." NACUBO Business Officer, V29, N1; pp.43-46.

Posey, Ellen I. (1983). Georgia State University Spending Patterns and the Atlanta Economy, 1983. Atlanta, Georgia: Georgia State University, Office of Institutional Planning. ERIC ED 234712

Taylor, Peter. (1990). "The Impact of Institutions of Higher Education on Local Income and Employment: The Case of Bristol Polytechnic." Higher Education Review, V22, N2; pp. 39-58.

Weitzman, Scott M. (1991). The Economic Impact of the Community College System on the State of Florida. Gainesville, Florida: Inter-Institutional Research Council. ERIC ED 336145

 

Attachment A - Sample Expenditure File

                  1                  2                  3                  4                  5                  6
12345678901234567890123456789012345678901234567890123456789012345

Montgomery County Office Supplies            45402Paper           0001458 0598
Cave City Electronics                                   42101Routers        0012849 1097
Nashville Publishing Company                     37209Software      0000751 0198

Columns 01 to 35 Vendor Name
Columns 36 to 40 Vendor Five-Digit Zip Code
Columns 41 to 51 Product or Service
Columns 52 to 58 Cost of Product or Service (including all leading zeros)
Columns 60 to 63 Date of Purchase (Month-Year)


THE PRINCIPAL RESEARCHER will consult with the system programmer before this file is prepared so that there is full concurrence on file composition and column format.

 

Attachment B - Sample Permanent Residence

                  1                  2                  3                  4                  5                  6
12345678901234567890123456789012345678901234567890123456789012345
123456789 45402
234567891 45401
345678912 45403
456789123 42101
567891234 37209

Columns 01 to 09 Student Social Security Number
Columns 11 to 15 Student Permanent Residence Five-Digit Zip Code


THE PRINCIPAL RESEARCHER will consult with the system programmer before this file is prepared so that there is full concurrence on file composition and column format.

 

Attachment C - Sample Survey Questions Used to Determine Spending by Resident Students

THE PRINCIPAL RESEARCHER will prepare a suggested cover letter to accompany the following brief survey. Responses to this survey will help determine the potential percentage of students who would remain in the local service area and those who would leave, and concomitantly take their money away from YOUR COLLEGE OR UNIVERSITY's local service area. Spending by students who remain in the local service area, but who might have left if YOUR COLLEGE OR UNIVERSITY did not exist, can then be included in the economic impact study.

Statement   What would you have done had you not attended YOUR COLLEGE OR
                     UNIVERSITY? Would you have:

Responses  _____ Attended a private college or university in the local area.
                    _____ Attended a state college or university in the local area.
                    _____ Remained in the local area, but not attend a college or university.

                    _____ Attended a private college or university in this state, but not in the local
                               area.
                    _____ Attended a state college or university in this state, but not in the local area.
                    _____ Moved to another area of the state, but not attend a college or university.

                    _____ Attended a private college or university in another state.
                    _____ Attended a state college or university in another state.
                    _____ Moved to another state, but not attend a college or university.

                    _____ Other

Multiple selections will unobtrusively provide a means of estimating the percentage of students who would remain in YOUR COLLEGE OR UNIVERSITY's local service area.

 

Attachment D - Sample Questions Used to Determine Economic Contributions by Local Alumni

THE PRINCIPAL RESEARCHER will prepare a suggested cover letter to accompany the following brief survey. Responses to this survey will help determine how YOUR COLLEGE OR UNIVERSITY alumni have been integrated into local businesses.

Statements

Graduation year from YOUR COLLEGE OR UNIVERSITY.

Permanent residence at time of graduation from YOUR COLLEGE OR UNIVERSITY.

Permanent residence now.

What would you have done had you not attended YOUR COLLEGE OR UNIVERSITY?

If you are employed, how closely related is your current job to your program of study at YOUR COLLEGE OR UNIVERSITY?

What is the salary or annual income of your current job?

Have you applied to another higher education institution since graduation from YOUR COLLEGE OR UNIVERSITY?

If you are a student, how closely related is your current academic program to your program of study at YOUR COLLEGE OR UNIVERSITY?

Multiple selections will unobtrusively provide a means of determining the extent to which YOUR COLLEGE OR UNIVERSITY alumni have reached career success and gained integration into the local service area.

 

 

March 24, 1999

John Q. Public, Director Office of Institutional Research YOUR COLLEGE OR UNIVERSITY 123 4th Street Anytown, USA 99999

Dear Mr. Public:

Enclosed, please find a proposal for an economic impact study of YOUR COLLEGE OR UNIVERSITY (Anytown, USA). Thank you for faxing the RFP guidelines.

As you review this proposal, please notice that I have attempted to identify all sources of money that flow into YOUR COLLEGE OR UNIVERSITY's local service area that can be reasonably identified. To give you and your colleagues a broader range of options for addressing the composition of YOUR COLLEGE OR UNIVERSITY's area of economic outreach, notice how I propose to perform all calculations using three multipliers, ranging from a conservative 1.8, to a median 2.4, to a liberal 3.0 multiplier.

Finally, the proposed methodology calls for a student survey and an alumni survey. The anticipated questions will focus on issues related exclusively to the proposed economic impact study. If desired, I will gladly discuss with you the possibility of expanding the scope of these surveys if you wish to use this process to look into other important issues for these two groups that go beyond an economic impact study.

Thank you for your assistance and consideration of our proposal for YOUR COLLEGE OR UNIVERSITY. I look forward to the opportunity to work with you and your college community, placing the economic impact study into final form before October 1999.

Sincerely,

THE PRINCIPAL RESEARCHER

Let me know how I can assist you in the areas of institutional research, statistics, and computer science education.


Please send comments or suggestions to Dr. Thomas W. MacFarland

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