The Economic Value of WTAMU Main Report

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Emsi uses a modification of the “diagonal similarity scaling” algorithm to balance the national SAM. GRAVITATIONAL FLOWS MODEL The most important piece of the Emsi MR-SAM model is the gravitational flows model that produces county-by-county regional purchasing coefficients (RPCs). RPCs estimate how much an industry purchases from other industries inside and outside of the defined region. This information is critical for calculating all IO models. Gravity modeling starts with the creation of an impedance matrix that values the difficulty of moving a product from county to county. For each sector, an impedance matrix is created based on a set of distance impedance methods for that sector. A distance impedance method is one of the measurements reported in the Oak Ridge National Laboratory’s County-to-County Distance Matrix. In this matrix, every county-to-county relationship is accounted for in six measures: great-circle distance, highway impedance, rail miles, rail impedance, water impedance, and highway-rail-highway impedance. Next, using the impedance information, the trade flows for each industry in every county are solved for. The result is an estimate of multi-regional flows from every county to every county. These flows are divided by each respective county’s demand to produce multi-regional RPCs. Appendix 5: Emsi MR-SAM 92
Appendix 6: Value per Credit Hour Equivalent and the Mincer Function Two key components in the analysis are 1) the value of the students’ educational achievements, and 2) the change in that value over the students’ working careers. Both of these components are described in detail in this appendix. Value per CHE Typically, the educational achievements of students are marked by the credentials they earn. However, not all students who attended WTAMU in the 2017-18 analysis year obtained a degree or certificate. Some returned the following year to complete their education goals, while others took a few courses and entered the workforce without graduating. As such, the only way to measure the value of the students’ achievement is through their credit hour equivalents, or CHEs. This approach allows us to see the benefits to all students who attended the university, not just those who earned a credential. To calculate the value per CHE, we first determine how many CHEs are required to complete each education level. For example, assuming that there are 30 CHEs in an academic year, a student generally completes 120 CHEs in order to move from a high school diploma to a bachelor’s degree, another 60 CHEs to move from a bachelor’s degree to a master’s degree, and so on. This progression of CHEs generates an education ladder beginning at the less than high school level and ending with the completion of a doctoral degree, with each level of education representing a separate stage in the progression. The second step is to assign a unique value to the CHEs in the education ladder based on the wage differentials presented in Table 1.4. 47 For example, the difference in regional earnings between a high school diploma and a bachelor’s degree is $25,500. We spread this $25,500 wage differential across the 60 CHEs that occur between a high school diploma and a bachelor’s degree, applying a ceremonial “boost” to the last CHE in the stage to mark the achievement of the degree. 48 We repeat this process for each education level in the ladder. Next we map the CHE production of the FY 2017-18 student population to the education ladder. Table 1.2 provides information on the CHE production of 47 The value per CHE is different between the economic impact analysis and the investment analysis. The economic impact analysis uses the region as its background and, therefore, uses regional earnings to calculate value per CHE, while the investment analysis uses the state as its backdrop and, therefore, uses state earnings. The methodology outlined in this appendix will use regional earnings; however, the same methodology is followed for the investment analysis when state earnings are used. 48 Economic theory holds that workers that acquire education credentials send a signal to employers about their ability level. This phenomenon is commonly known as the sheepskin effect or signaling effect. The ceremonial boosts applied to the achievement of degrees in the Emsi impact model are derived from Jaeger and Page (1996). Appendix 6: Value per Credit Hour Equivalent and the Mincer Function 93
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AUGUST 2019 The Economic Value of W
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Executive Summary This report asses
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created by WTAMU is equal to approx
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Investment Analysis Investment anal
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Introduction West Texas A&M Univers
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CHAPTER 1: Profile of West Texas A&
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WTAMU employee and finance data TAB
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When using the Alumni Outcomes data
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The Texas Panhandle economy WTAMU s
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Table 1.4 and Figure 1.5 present th
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IN this chapter, we estimate the fo
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Operations spending impact Faculty
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the next four rows under the sectio
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non-labor income. This sums togethe
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ing impacts. Again, since construct
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of employees reported for each comp
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Calculating the increase in income
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the retained students, we estimate
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Alumni impact In this section, we e
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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
Page 71 and 72: Ogden, Cynthia L., Molly M. Lamb, M
Page 73 and 74: U.S. Department of Health and Human
Page 75 and 76: Based on this sensitivity analysis,
Page 77 and 78: • Scenario 1: Increasing the perc
Page 79 and 80: Retained student variable The retai
Page 81 and 82: Economics Study of the allocation o
Page 83 and 84: Appendix 3: Frequently Asked Questi
Page 85 and 86: money” is called discounting and
Page 87 and 88: Appendix 5: Emsi MR-SAM Emsi’s MR
Page 89 and 90: Census’ Current Population Survey
Page 91: The matrices are built utilizing Em
Page 95 and 96: economics. Those critical of the Mi
Page 97 and 98: Appendix 8: Overview of Investment
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Page 101 and 102: Appendix 9: Shutdown Point The inve
Page 103 and 104: Consider benefits now with referenc
Page 105 and 106: Appendix 10: Social Externalities E
Page 107 and 108: y education, gender, and ethnicity.
Page 109: weighted heavily towards the less t
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