University of Houston-Victoria


Appendix 7: Alternative Education Variable

In a scenario where the university did not exist, some of its students would still be able to avail themselves of an alternative comparable education. These students create benefits in the region even in the absence of the university. The alternative education variable accounts for these students and is used to discount the benefits we attribute to the university.

Recall this analysis considers only relevant economic information regarding the university. Considering the existence of various other academic institutions surrounding the university, we have to assume that a portion of the students could find alternative education and either remain in or return to the region. For example, some students may participate in online programs while remaining in the region. Others may attend an out-of-region institution and return to the region upon completing their studies. For these students—who would have found an alternative education and produced benefits in the region regardless of the presence of the university—we discount the benefits attributed to the university. An important distinction must be made here: the benefits from students who would find alternative education outside the region and not return to the region are not discounted. Because these benefits would not occur in the region without the presence of the university, they must be included.

In the absence of the university, we assume 15% of the university’s students would find alternative education opportunities and remain in or return to the region. We account for this by discounting the alumni impact in Chapter 2 by 15%. In other words, we assume 15% of the benefits created by the university’s students would have occurred anyway in the counterfactual scenario where the university did not exist. A sensitivity analysis of this adjustment is presented in Appendix 1.