Appendix 4: Example of Sales versus Income
This appendix provides answers to some frequently asked questions about the results.
What is economic impact analysis?
Economic impact analysis quantifies the impact from a given economic event— in this case, the presence of a university—on the economy of a specified region.
Do the results differ by region, and if so, why?
Yes. Regional economic data are drawn from Emsi’s proprietary MR-SAM model, the Census Bureau, and other sources to reflect the specific earnings levels, jobs numbers, unemployment rates, population demographics, and other key characteristics of the region served by the university. Therefore, model results for the university are specific to the given region.
Are the funds transferred to the university increasing in value, or simply being re-directed?
Emsi’s approach is not a simple “rearranging of the furniture” where the impact of operations spending is essentially a restatement of the level of funding received by the university. Rather, it is an impact assessment of the additional income created in the region as a result of the university spending on payroll and other non-pay expenditures, net of any impacts that would have occurred anyway if the university did not exist.
Total economic impact: How do I communicate this in laymen’s terms?
Big numbers are great, but putting them into perspective can be a challenge. To add perspective, find an industry with roughly the same “% of GRP” as your university (Table 1.3). This percentage represents its portion of the total gross regional product in the region (similar to the nationally recognized gross domestic product but at a regional level). This allows the university to say that their single brick and mortar campus does just as much for the Coastal Bend as the entire Utilities industry, for example. This powerful statement can help put the large total impact number into perspective.