The Economic Value of WTAMU Main Report

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CHAPTER 2: Economic Impacts on the Texas Panhandle Economy WTAMU impacts the Texas Panhandle economy in a variety of ways. The university is an employer and buyer of goods and services. It attracts monies that otherwise would not have entered the regional economy through its day-to-day and research operations, its construction and entrepreneurial activities, and the expenditures of its visitors and students. Further, it provides students with the knowledge, skills, and abilities they need to become productive citizens and add to the overall output of the region. Chapter 2: Economic Impacts on the Texas Panhandle Economy 20
IN this chapter, we estimate the following economic impacts of WTAMU: 1) the operations spending impact, 2) the research spending impact, 3) the construction spending impact, 4) the start-up company impact, 5) the visitor spending impact, 6) the student spending impact, and 7) the alumni impact, measuring the income added in the region as former students expand the regional economy’s stock of human capital. When exploring each of these economic impacts, we consider the following hypothetical question: How would economic activity change in the Texas Panhandle if WTAMU and all its alumni did not exist in FY 2017-18? Each of the economic impacts should be interpreted according to this hypothetical question. Another way to think about the question is to realize that we measure net impacts, not gross impacts. Gross impacts represent an upperbound estimate in terms of capturing all activity stemming from the university; however, net impacts reflect a truer measure of economic impact since they demonstrate what would not have existed in the regional economy if not for the university. Economic impact analyses use different types of impacts to estimate the results. The impact focused on in this study assesses the change in income. This measure is similar to the commonly used gross regional product (GRP). Income may be further broken out into the labor income impact, also known as earnings, which assesses the change in employee compensation; and the non-labor income impact, which assesses the change in business profits. Together, labor income and non-labor income sum to total income. Another way to state the impact is in terms of jobs, a measure of the number of full- and part-time jobs that would be required to support the change in income. Finally, a frequently used measure is the sales impact, which comprises the change in business sales revenue in the economy as a result of increased economic activity. It is important to bear in mind, however, that much of this sales revenue leaves the regional economy through intermediary transactions and costs. 8 All of these measures – added labor and non-labor income, total income, jobs, and sales – are used to estimate the economic impact results presented in this chapter. The analysis breaks out the impact measures into different components, each based on the economic effect that caused the impact. The following is a list of each type of effect presented in this analysis: Operations Spending Impact Research Spending Impact Construction Spending Impact Start-up Company Impact Visitor Spending Impact Student Spending Impact Alumni Impact TOTAL ECONOMIC IMPACT • The initial effect is the exogenous shock to the economy caused by the initial spending of money, whether to pay for salaries and wages, purchase goods or services, or cover operating expenses. 8 See Appendix 4 for an example of the intermediary costs included in the sales impact but not in the income impact. Chapter 2: Economic Impacts on the Texas Panhandle Economy 21
Page 1 and 2: AUGUST 2019 The Economic Value of W
Page 3 and 4: Executive Summary This report asses
Page 5 and 6: created by WTAMU is equal to approx
Page 7 and 8: Investment Analysis Investment anal
Page 9 and 10: Introduction West Texas A&M Univers
Page 11 and 12: CHAPTER 1: Profile of West Texas A&
Page 13 and 14: WTAMU employee and finance data TAB
Page 15 and 16: When using the Alumni Outcomes data
Page 17 and 18: The Texas Panhandle economy WTAMU s
Page 19: Table 1.4 and Figure 1.5 present th
Page 23 and 24: Operations spending impact Faculty
Page 25 and 26: the next four rows under the sectio
Page 27 and 28: non-labor income. This sums togethe
Page 29 and 30: ing impacts. Again, since construct
Page 31 and 32: of employees reported for each comp
Page 33 and 34: Calculating the increase in income
Page 35 and 36: the retained students, we estimate
Page 37 and 38: Alumni impact In this section, we e
Page 39 and 40: income is the difference between th
Page 41 and 42: Once these allocations are complete
Page 43 and 44: These impacts, stemming from spendi
Page 45 and 46: Student perspective To enroll in po
Page 47 and 48: their full earning potential that t
Page 49 and 50: Linking education to earnings Havin
Page 51 and 52: As shown in Table 3.2, the $44.6 mi
Page 53 and 54: Price Index), the corresponding nom
Page 55 and 56: We apply another reduction factor t
Page 57 and 58: TABLE 3.3: PRESENT VALUE OF ADDED T
Page 59 and 60: Social perspective Texas benefits f
Page 61 and 62: to income assistance amount to $1.5
Page 63 and 64: money spent on operations of the un
Page 65 and 66: WHILE WTAMU’s value to the Texas
Page 67 and 68: Buss, Christian, Jeffrey Parker, an
Page 69 and 70: Jaeger, David A. and Marianne E. Pa
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Ogden, Cynthia L., Molly M. Lamb, M
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U.S. Department of Health and Human
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Based on this sensitivity analysis,
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• Scenario 1: Increasing the perc
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Retained student variable The retai
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Economics Study of the allocation o
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Appendix 3: Frequently Asked Questi
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money” is called discounting and
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Appendix 5: Emsi MR-SAM Emsi’s MR
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Census’ Current Population Survey
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The matrices are built utilizing Em
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Appendix 6: Value per Credit Hour E
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economics. Those critical of the Mi
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Appendix 8: Overview of Investment
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10 years from today given the going
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Appendix 9: Shutdown Point The inve
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Consider benefits now with referenc
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Appendix 10: Social Externalities E
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y education, gender, and ethnicity.
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weighted heavily towards the less t
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