The Economic Value of WTAMU Main Report

Operation and maintenance of plant expenditures are mapped to the industries
that relate to capital construction, maintenance, and support, while the
university’s remaining expenditures are mapped to the remaining industries.
We now have three vectors of expenditures for WTAMU: one for salaries,
wages, and benefits; another for operation and maintenance of plant; and a
third for the university’s purchases of supplies and services. The next step is
to estimate the portion of these expenditures that occur inside the region. The
expenditures occurring outside the region are known as leakages. We estimate
in-region expenditures using regional purchase coefficients (RPCs), a measure
of the overall demand for the commodities produced by each sector that is
satisfied by regional suppliers, for each of the approximately 1,000 industries
in the MR-SAM model. 11 For example, if 40% of the demand for NAICS 541211
(Offices of Certified Public Accountants) is satisfied by regional suppliers, the
RPC for that industry is 40%. The remaining 60% of the demand for NAICS
541211 is provided by suppliers located outside the region. The three vectors
of expenditures are multiplied, industry by industry, by the corresponding RPC
to arrive at the in-region expenditures associated with the university. See Table
2.1 for a break-out of the expenditures that occur in-region. Finally, in-region
spending is entered, industry by industry, into the MR-SAM model’s multiplier
matrix, which in turn provides an estimate of the associated multiplier effects
on regional labor income, non-labor income, total income, sales, and jobs.
Table 2.2 presents the economic impact of university operations spending,
not including research spending. The people employed by WTAMU and their
salaries, wages, and benefits comprise the initial effect, shown in the top row
of the table in terms of labor income, non-labor income, total added income,
sales, and jobs. The additional impacts created by the initial effect appear in
TABLE 2.2: OPERATIONS SPENDING IMPACT, FY 2017-18
Labor income
(thousands)
Non-labor income
(thousands)
Total income
(thousands)
Sales
(thousands)
Jobs supported
Initial effect $68,196 $0 $68,196 $161,878 869
Multiplier effect
Direct effect $12,635 $9,226 $21,861 $42,967 346
Indirect effect $3,502 $2,231 $5,732 $12,621 104
Induced effect $13,664 $12,944 $26,608 $44,724 366
Total multiplier effect $29,801 $24,401 $54,202 $100,312 816
Gross impact (initial + multiplier) $97,996 $24,401 $122,398 $262,190 1,685
Less alternative uses of funds -$10,610 -$10,838 -$21,448 -$34,510 -283
Net impact $87,386 $13,563 $100,950 $227,679 1,402
Source: Emsi impact model.
11 See Appendix 5 for a description of Emsi’s MR-SAM model.
Chapter 2: Economic Impacts on the Texas Panhandle Economy 24