ECU's Economic Impact on the Region and the State
East Carolina University’s economic impact on the region and state speaks to the university’s mission to be a national model for regional transformation. Read about how ECU has improved the quality of life in the East over recent years through being an employer, provider, and purchaser in the region’s 41 counties east of I-95.
O U R S H A R E D D I R E C T I O N ECU’s Economic Impact on the Region and the State OFFICE OF THE CHANCELLOR From the Chancellor T his economic impact study confirms what we have believed for some time. East Carolina University’s economic impact is significant, especially in our home territory of eastern North Carolina. During my travels, I often hear others refer to ECU as the “economic engine of the East” or the “beacon of hope.” Our mission is to serve as a national model for regional transformation. We are committed to this. Our economic impact is only one dimension of that commitment, but it is a very important one. I want to thank Professor Wubneh for completing this study. We hope you will find it informative, and we invite your comments. Steve Ballard Chancellor 1 Acknowledgements A project of this magnitude could not have been completed without the support of many individuals. Mickey Dowdy and Clint Bailey of ECU University Advancement and Marketing and Publications, respectively, were very helpful in providing advice and encouragement and in reviewing drafts of the report. Many university staff members were very generous with their time in providing information needed for the analysis. I am especially thankful to Kelly Harding of the AF Financial Reporting Administration, Diana Lys of the College of Education, Mary Holland of the College of Nursing, Greg Prince of the ECU Medical & Health Sciences Foundation, Lee Workman of the Athletics Office, Chris Buddo of the School of Music, Aaron Lucier of Campus Living, Ted Morris of Engagement, Innovation and Economic Development, and Marti Van Scott of Research and Graduate Studies. Your support and enthusiasm in providing information is greatly appreciated. In addition, I wish to thank Debbie Vargas of the Greenville Convention and Visitors Bureau for the information on hotel occupancy and daily expense rates. I also want to thank Brenda Wilson of the planning program in the Department of Geography for reviewing drafts of the report and Matthew Carey, a graduate student, for drafting the maps. Last, but not least, I want to thank Chancellor Ballard for giving me the opportunity to work on this project. Mulatu Wubneh Greenville, North Carolina 2011 2 Table of Contents Executive Summary 5 ECU as an Engine of Economic Growth 5 ECU By the Numbers 6 ECUâ€™s Economic Impact on the Region and the State 7 Introduction: The Report 7 Part One: Background 8 ECU as an Institutional Enterprise 8 Mission, Values, and Strategic Directions 8 Students, Graduation, and Work-Life Earnings 9 Alumni 11 Faculty and Staff 12 ECU as a Regional Economic Anchor 13 Part Two: Economic Operations of the University 14 Revenue and Operating Expenditures 14 Employment and Payroll 15 Capital Costs 15 Part Three: Economic Impact 16 Economic Impact Analysis 16 Multipliers 17 Geographic Area 17 Economic Impact Estimates 18 Nonpayroll Direct Spending 18 Payroll Impact 18 Capital Expenditure 19 Student Spending 19 Visitors Spending 20 Athletics Spending 21 Nonathletics Spending 22 Summary 22 ECU and Return on Investment to the State 22 Part Four: ECU in the Community 23 Human Capital and Economic Prosperity 23 Teachers 23 Health Professionals 24 Arts, Culture, and Entertainment 25 Research and Creative Activity 25 Conclusion 26 Notes 27 Appendix 28 3 4 Executive Summary $242 Million State Appropriations $3.3 Billion ECU’s Economic Impact to the State ECU as an Engine of Economic Growth • With a total employment of 5,343 in 2009, ECU is the second-largest employer in Pitt County behind Pitt County Memorial Hospital. • Factoring direct spending by the university and its constituents (students, faculty, staff, and visitors), and “the multiplier effect” of their spending, ECU in 2009 generated a total economic impact of $1.834 billion in eastern North Carolina with a multiplier of 1.8. This impact translates into a total statewide output impact of $3.3 billion. • In terms of returns on investment, ECU generates a total of $13.64 for each dollar invested by the state. Summary of Economic Impact • A breakdown of the impact shows that employee spending accounted for 39 percent; students, 33 percent; university (nonpayroll spending), 19 percent; capital expenditure, 6 percent; and visitors, 3 percent of the total economic impact. KEY Category $ Impact Employment Impact • The total employment impact of spending by the university and its constituents in 2009 was 17,585. Student Spending $601,231,170 7,787 • In the last five years (2006–2010), ECU spent an average of $56.5 million per year on construction, directly generating 1,170 jobs. Total capital expenditure for the five years amounted to $282 million. • In terms of regional impact, about 50 percent of the payment for capital expenses was made to vendors with an eastern North Carolina location. Visitors Spending $63,722,930 792 3.5% Nonpayroll Spending $353,571,710 4,373 19.3% 32.8% 5.9% Capital Expenditure $107,856,770 1,170 38.6% Employee Spending $707,783,840 3,463 TOTAL $1,834,166,420 17,585 5 ECU By the Numbers • With an enrollment of more than 27,000 students, ECU is the third-largest institution in the University of North Carolina system. • ECU has 13 colleges and schools providing programs in education, humanities, social sciences, and several professional programs including business, nursing, medicine, technology, and engineering. • In five years (2005–2009), ECU has graduated an average of 4,800 students a year. • ECU contributes to the development of human capital by training community and business leaders, teachers, and health-care professionals as illustrated below: n Out of ECU’s 123,000 living alumni whose addresses are known, more than 70 percent live in North Carolina; 58 percent of these are in the East. n Many of the graduates from the liberal arts and basic science foundation programs, as well as those from professional programs such as business, technology and engineering, communications, human ecology, and health and human performance, are playing a leading role in building sustainable communities in the East. n The College of Education prepares more teachers than any other institution in the UNC system. In nearly 40 percent of the counties in the East, onethird of the teachers are ECU graduates. 6 The College of Nursing ranks No. 1 in the number of nursing graduates working in the state. In several counties in the East, the demand for more nurses is met by ECU graduates. n Since its opening in 1977, the Brody School of Medicine has graduated more than 1,900 physicians; about 60 percent reside in North Carolina. n The College of Business is one of four colleges in the state that offer fully online AACSB-accredited MBA programs. n ECU’s distance education program is opening doors for more than 6,000 students who would otherwise might not have the opportunity to attend oncampus classes. n • ECU plays an important role in sustaining a vibrant cultural community in the region. Through its fine arts programs, the School of Music in 2010 organized 34 ticketed and 84 nonticketed activities in jazz, opera, concerts, music festivals, and children’s music programs. • ECU spent $41 million in research in 2009–2010, an increase of 44 percent compared to figures in 2004–2005. • For the period 2007–2009, ECU reported 37 new inventions, five new U.S. patents secured, and nine new U.S. patent applications filed. ECU’s Economic Impact on the Region and the State Introduction: The Report E ven as East Carolina University has grown to a nationally recognized research university, its focus has remained on improving the quality of life in eastern North Carolina—all 41 counties east of I-95—by acting as a major employer, purchaser, and provider of services across the region. The university is dedicated to having a direct, vital influence on the region of its roots and is focused on creating economic prosperity. It is a direction shared with the region we call home. The following is an analysis of a study of the economic impact of East Carolina University (ECU) on the state of North Carolina and eastern North Carolina in particular. The objective is to quantify the economic influences of ECU on the East through the various activities and operations of the university. The direct expenditure by the university and its constituents (faculty, staff, students, and visitors) translates into increased economic activities resulting in growth in income and employment. By using a standard economic model, this study estimates the total economic impact of ECU on the eastern part of the state. Much like other academic institutions, ECU generates additional economic impacts that are often difficult to quantify and hence are not captured by using dollar values. ECU contributes to the state’s economic growth through an ongoing supply of skilled professionals in the form of doctors, nurses, teachers, and other business and community leaders. It also improves the quality of life for the people in the East through a variety of activities in the form of uncompensated health services; volunteer work of its employees and students; athletics, musical, and other cultural events; and scientific lectures, workshops, seminars, and other continuing education programs. This study explains some of these services under the section “ECU in the Community.” The study is organized into four parts. Part One sets the stage with an introduction of current conditions at ECU. Part Two highlights the operation of the university, and Part Three estimates the indirect and induced or “multiplier” effects of the university’s and its constituents’ spending in eastern North Carolina. Most data used in the study are from 2009, the most complete, up-to-date information available. Part Four discusses the role of ECU in building sustainable communities—helping improve the quality of health and education, expanding educational opportunities, and supporting the development of local businesses and other communities. The conclusion projects the future by identifying the main reasons ECU’s contributions to the growth of the economy of the East could be even greater in the years ahead. 7 Part One: Background ECU as an Institutional Enterprise O n March 27, 2007, ECU celebrated its centennial. In its first 100 years, ECU, which was once largely known as a college for training teachers, transformed itself into the third-largest institution in the state of North Carolina, with 13 colleges and schools. Many of these colleges and schools provide programs focusing on education, humanities, and social sciences, while others offer professional programs including business, medicine, nursing, and technology and engineering. At the same time, the institution has experienced major changes characterized by a significant increase in enrollment and the diversity of programs and personnel. As ECU continues to move forward in a new century, it continues to clarify its mission and strategic objectives while maintaining its commitment to serve the state of North Carolina in general and eastern North Carolina in particular. Whether it is meeting the demand for more teachers and health-care professionals, improving the economic conditions and quality of life of the region, or providing world-class entertainment and inspiration, ECU has delivered on its promises to serve. Mission, Values, and Strategic Directions At the core of ECU’s mission is public service and regional transformation. In the fall of 2009, ECU launched new strategic directions that will serve as a guide for future growth and development of the institution. These directions embody ECU’s enduring values that include respect, authenticity, accountability, teamwork, and commitment to service. Located at the heart of eastern North Carolina, ECU is committed to extending the benefits of its research and scholarship to communities in the East. This commitment is visible in the work of education, the health sciences, and other social and physical science programs whose graduates are playing a major role in teaching, providing health services, and serving in a leadership position in the region. Other programs such as business, fine arts, music, communication, and community development 8 ECU Colleges and Schools Thomas Harriot College of Arts and Sciences Brody School of Medicine College of Allied Health Sciences College of Business College of Education College of Fine Arts and Communication College of Health and Human Performance College of Human Ecology College of Nursing College of Technology and Computer Science Honors College School of Dental Medicine Graduate School are contributing significantly to improving the economic condition and quality of life of the people in eastern North Carolina. ECU maintains that it plans to become an “institution of the future,” willing to chart a new course and engage globally. Its mission statement states that ECU would serve as a model in service and transformation by “creating a strong, sustainable future for eastern North Carolina” and “improving the quality of life” in the region. In reaffirming its commitment to leadership and service to the state, ECU articulates that it will: • produce more and better teachers and develop best practices to improve public education in North Carolina, • foster student access and success along the entire prekindergarten–20 educational continuum, • expand and apply its expertise, research, and outreach functions to address regional and statewide problems related to the economy, the environment, energy, and water, among other topics, • increase faculty and student knowledge, motivation, and capacity for scholarly instruction and learning, research, and engagement, • produce more and better physicians, dentists, nurses, and allied-health professionals to meet the expanding needs of North Carolina and beyond, • create vibrant and livable communities through the arts, athletics, and other cultural enrichment, and • produce undergraduate and graduate students with the skills, knowledge, expertise, and entrepreneurial drive that will help transform eastern North Carolina. ECU’s mission is to serve as a model in service and transformation by creating a strong, sustainable future for eastern North Carolina. The university’s strategic directions outline the areas through which it will have the most impact. • Education for a New Century: Preparing students to compete and succeed in the global economy • The Leadership University: Distinguishing the university by the ability to train and prepare leaders for our state and nation • Economic Prosperity in the East: Creating a strong sustainable future for the East through education, innovation, investment, and outreach • Health Care and Medical Innovation: Saving lives, curing diseases, and positively transforming the quality of health care for the region and the state • The Arts, Culture, and Quality of Life: Providing world-class entertainment and powerful inspiration as we work together to sustain and improve the community’s quality of life Students, Graduation, and Work-Life Earnings The education of undergraduate and graduate students is central to the mission of ECU. In the fall of 2010, ECU enrolled more than 27,000 students, of which 78 percent were undergraduate students, 21 percent graduate and doctoral students, and 1 percent medical students. About 60 percent of the students are females and 40 percent are males. Minorities accounted for about 20 percent of the student body, and 12 percent were out-of-state students. More than 22 percent of the students are enrolled primarily in distance-education programs. 2010 Enrollment Statistics TOTAL ENROLLMENT, FALL 2010: 27,873 Graduate 20.9% Out-ofstate 12.2% Medical 1.1% Undergraduate 78% In-state 87.8% Other* 7.2% Minority 19.6% Male 39.7% Female 60.3% Nonminority 73.1% * Includes nonresident alien, race/ethnicity unknown, and two or more races Source: Office of Institutional Planning and Research 9 Enrollment at ECU, 2000–2010 Year ON-CAMPUS OFF-CAMPUS 2000 17,851 18,750 2001 18,174 19,412 899 1,238 2002 18,955 20,577 2003 19,374 21,756 2004 19,570 22,767 2005 19,471 2 3 ,1 6 4 2006 19,891 24,351 2007 20,720 25,990 2008 21,494 2 7, 6 7 7 6,183 2009 21,584 2 7, 6 5 4 6,070 2010 2,382 3,197 3,693 4,460 5,270 2 7, 8 7 3 21,773 0 1,622 5 10 6,100 15 Thousands of Students During the past 10 years, enrollment at ECU has increased at an average annual rate of 4 percent. This increase has put pressure on the university’s scarce resources and its capacity to expand facilities, both on the Main and Health Sciences campuses. The university has invested more than $280 million in capital expenditure in the last five years to accommodate the significant growth in enrollment. 20 25 30 These students are trained in various fields including education, arts and sciences, business, health-related fields, technology and computer science, fine arts and communication, and human ecology. A distribution of the 2009 graduates shows that 18 percent of the graduates received their degree in education, 17 percent in arts and sciences, 16 percent in health-related fields, 13 percent in business, 11 percent in human ecology, 9 percent in health and human performance, and 8 percent both in technology and computer science, and fine arts and communication. One of the primary objectives of ECU is to help build the stock of human capital in the state by providing a wide range of educational opportunities for citizens to acquire skills and develop 2009 Degrees Conferred knowledge. ECU’s commitment to TOTAL NUMBER OF GRADUATES OF SUMMER 2008, FALL 2008, AND SPRING 2009 = 5,497 education extends beyond its classrooms. Fine Arts and The university’s distance-education Communication program serves more than 6,000 Education 8% Technology and graduate and undergraduate students. Computer Science 18% The College of Business, College of 8% Education, College of Fine Arts and Communication, College of Health Health and Human Performance, College of and Human 9% Performance Nursing, and College of Technology and Computer Science have developed Arts and full-fledged degree programs to serve 17% Sciences individuals who may not have easy access 11% to campus programs. ECU also works Human Ecology directly with local schools, teachers, and parents to prepare the next generation of North Carolinians to succeed in a 13% 16% knowledge-based economy. In the last five years, ECU has graduated an average of 4,800 students annually. 10 Health-Related Fields* *Includes medicine, nursing, and allied health Business Estimates of Work-Life Earnings by Educational Attainment AVERAGE ANNUAL EARNINGS/WORK-LIFETIME EARNINGS High School Diploma $25,909 Bachelor’s Degree $45,394 Master’s Degree $54,547 Doctoral Degree $81,430 Professional Degree $99,253 0 $1,226,600 $2,140,900 $2,463,100 $3,440,000 $4,411,500 1 2 3 Millions of Dollars 4 5 Source: The Big Payoff: Educational Attainment and Synthetic Estimates of Work-Life Earnings US Census Bureau, July 2002 Perhaps one of the most tangible benefits associated with an educated labor force is the work-life earnings of students with degrees. According to the 2000 US Census, while workers with only a high school certificate were expected to earn an average income of $25,909 per year, those with bachelor’s degrees were expected to earn an average income of $45,394. The higher wage-earning capacity shows that the average worker with a bachelor’s degree can expect to earn $914,000 more than their counterparts with high school diplomas over their worklifetime. The benefits of graduates with more advanced degrees compared to those with only high school diplomas are even much more significant as shown above. Alumni Alumni constitute ECU’s major asset. Out of ECU’s 123,000 living alumni whose addresses are known, more than 70 percent reside in North Carolina, and 58 percent of these are in eastern North Carolina. In terms of contributions to communities, many of ECU’s alumni are playing prominent roles in various fields, including business, health care, the arts, media, and others. ECU Alumni per County Total Number of ECU Alumni 0–99 500–699 100–299 700–899 300–499 900–1,099 1,100+ 11 Prominent ECU Alumni • Rick Atkinson, journalist, author, and three-time Pulitzer Prize winner • Chris Johnson, NFL player, 2009 Offensive Player of the Year • Kelly King, CEO, BB&T • James Maynard, founder and CEO of Golden Corral restaurants • Scott Avett, musician and visual artist • Ronnie Barnes, vice president of medical services, the NFL’s New York Giants • Sandra Bullock, actor, Academy Award winner • Velton Ray Bunch, Emmy Award-winning composer • Vince and Linda McMahon, founders and chief executives of World Wrestling Entertainment • Sandra Mims-Rowe, retired editor, the Daily Oregonian, six-time Pulitzer Prize winner • Dan Neil, the Los Angeles Times, Pulitzer Prize winner • Lisa Callahan, MD, medical staff director, the NBA’s New York Knicks • Beverly Cox, director of collection and exhibits, the National Portrait Gallery • David Garrard, NFL player • Beth Grant, actor • Bob Greczyn, former CEO, Blue Cross Blue Shield of North Carolina Faculty by Rank, 2009 • Gen. Gary L. North, commander, Pacific Air Forces USAF • Margaret O’Connor, former photo editor, The New York Times, two-time Pulitzer Prize winner • Emily Procter, actor, CSI Miami • C. J. Wilson, NFL player, Green Bay Packers 2011 Super Bowl champion team Employees by Occupational Category, 2009 Administrators Other Instructor 14% 1% 34% Professor Assistant Professor 8% 17% Faculty 33% 21% Clerical 30% Associate Professor Faculty and Staff ECU’s faculty are engaged in various activities including teaching, research, and service to the community. In the past 10 years, in response to the increasing enrollment and the corresponding demand for more classes, ECU has managed to increase the number of faculty by about 3 percent per year. This increase was also partially fueled by the need for building a critical mass of research faculty in some areas identified as vital to meeting the strategic objectives of the 12 4% Other 21% 25% Professional institution. Based on 2009 data, the general characteristics of the faculty show that 21 percent are professors, 30 percent associate professors, 34 percent assistant professors, 14 percent instructors, and 1 percent other. ECU also employs other individuals with various skills and occupational attributes. The 2009 employment distribution shows that while 33 percent are faculty, 25 percent are professionals, 21 percent clerical, 4 percent administrators, and 17 percent other professionals. Faculty, 2000â€“2010 1,300 Year 2000 2001 1,355 2002 1,380 2003 1,463 2004 1,589 2005 1,606 2006 1,700 2007 1,711 2008 1,804 2009 1,782 1,750 2010 0 500 1,000 Total Faculty ECU as a Regional Economic Anchor ECU has become not only the center of educational and cultural activities but also the engine of economic growth for the region through its role as employer, purchaser of goods and services, real-estate developer, advisor/network builder, and workforce educator. As one of the leading employers in the county, ECU brings in about $696 million annually, more than 4.0 times the total revenue of 1,500 2,000 that of Pitt County and 8.8 times of that of the City of Greenville. In terms of employment, with 5,343 employees, ECU ranks second in the county after Pitt County Memorial Hospital, which has 7,373 employees. In 2009, ECU and Pitt County Memorial Hospital accounted for 7.7 percent and 10.6 percent respectively of the total employment in the county. 2009 Comparative Revenue (in millions) $696 East Carolina University $172 Pitt County $78 City of Greenville 0 100 200 300 400 500 Millions of Dollars 600 700 800 2009 Comparative Employment FEDERAL, STATE, AND LOCAL/PRIVATE INDUSTRY East Carolina University 5,343 Pitt County Memorial Hospital 7,373 City of Greenville 23,019 50,963 Pitt County 21,150 0 48,669 10 20 30 40 50 Thousands of Employees 60 70 80 13 Part Two: Economic Operations of the University Revenue and Operating Expenditures E CU is a significant economic force by virtue of its position as a major employer and purchaser of goods and services in the East. The impact of the university on the local economy can be measured, in some ways, by the amount of revenue it injects into the regional economy. In 2009, East Carolina University generated more than $696 million in revenue. Of this, $400 million was operating revenue, which came largely from student tuition fees (18.0 percent), patient services (20.8 percent), auxiliary services (12.4 percent), and grants and other contracts (5.9 percent). With the state appropriation of $242 million (accounting for 35.0 percent of the revenue), total revenue rose to $642 million. The remaining revenues came from gifts, interest earned, and other operating revenues. The 2009 state appropriation of $242 million shows a 10-percent decline from the 2008 figure of $268 million, thus reflecting the financial difficulties that the state continues to face. Despite these challenges, ECU is still the largest source of revenue in the region. In terms of expenditure, in 2009, the university spent $695 million in operating expenses. A breakdown of the expenses into the respective categories shows that a majority of the expenses was for salaries and benefits (67 percent), followed by services (13 percent) and supplies and materials (10 percent). It is important to note that the $695 million total expense reflects the cash outlay in 2009; it does not include capital expenses. For the purpose of evaluating ECU’s economic impact, capital expenses will be evaluated separate from operating expenses because capital expense allocations are based on multiyear scheduling. Similarly, since salaries and benefits account for the largest share of the operating expenses, and employees’ expenses have problems of leakage from the regional economy—the expenses associated with the purchase of goods and services outside the region—salaries and benefits will also be examined under a different category. Thus, after making the necessary adjustments—taking out salaries and benefits—the remaining operating expenditure of the university in 2009 was $189 million. 2009 Revenue 2009 Operating Expenditures Patient services $145,123.50 Salaries and benefits 67% 20.8% Student tuition and fees $125,070.00 18.0% 12.4% 5.9% Other 7.9% (gifts, interest earned, other operating revenues) $56,336.70 35.0% State appropriations $241,751.80 Total $695,669 14 Auxiliaries $86,465.60 Grants and contracts $40,921.40 Depreciation Utilities 3% 3% 4% Scholarships and fellowships 10% Supplies and materials 13% Services Total $694,975 Employment and Payroll Capital Costs In 2009, ECU paid out $466 million in salaries and benefits to its 5,343 employees. The expenditure by these employees, along with expenditures by students and visitors, generates additional jobs that support the regionâ€™s economy. One of the major manpower contributions of ECU is its capacity to attract highly qualified professionals with expertise and knowledge in various fields. As a result, on a per capita basis, Pitt County and its surrounding areas have more highly skilled professionals than any other area in eastern North Carolina. ECU has spent more than $282 million in the last five years to finance capital projects such as the construction of the East Carolina Heart Institute at ECU, the Health Sciences Library, and West End Dining Hall; additions to Fletcher Music Center and the Rivers Building; and maintenance and renovation of a number of other facilities. In terms of regional impact, according to ECU Administration and Finance, close to half of the payment for capital expenses (for instance, more than $20 million in 2009) was made to vendors with an eastern North Carolina location. 2006â€“2010 Capital Expenditure 2006 $75,701,943.91 2007 $43,531,591.99 2008 $54,276,318.07 2009 $41,222,206.99 2010 $67,674,552.07 0 10 20 30 40 50 Millions of Dollars 60 70 80 Source: ECU Administration and Finance 15 Part Three: Economic Impact Economic Impact Analysis B oth the level and spending patterns by the university and its constituents—faculty and staff, students, and visitors—must be taken into account when estimating the economic impact of ECU. One method that has been widely used to trace the economic impact of institutions across various sectors of an economy is the input-output (I/O) model.1 The I/O provides a general framework for measuring the links among the various sectors of the economy at the national, regional, or local levels. The I/O framework also helps to develop the multiplier, which can be used to estimate the ripple effects of investments or expenditure by different groups. Hence, in an empirical analysis, the overall impact of expenditure by ECU, its faculty, staff, students, and visitors can be estimated by using the I/O multiplier. Data on operation expenditures and wages and salaries paid to employees can be utilized to provide the full range of impact by the university on the local economy. The Nonpayroll Expenditure Employee Spending • Direct impact: Expenditures by the university, employees, students, and visitors injected directly into the regional economy • Indirect impact: The ripple effects resulting from the direct expenditure based on inputoutput model representing interindustry links • Induced impact: Impact of household expenditures generated as employees spend a portion of their wages and salaries • Total impact: The sum of the direct, indirect, and induced effects spending by the university and other groups is viewed as a change in the “final demand,” which sets in motion a series of additional spending resulting in an increase in total output, earnings, and employment. These impacts are often represented as direct, indirect, and induced impacts as shown above. Student Spending INCOME IMPACT Capital Expenditure Visitor Spending Multiplier Effect INCOME • Direct • Indirect • Induced 16 Major Components of an Economic Impact EMPLOYMENT EMPLOYMENT IMPACT There are several input-output models that can be used to estimate impacts. RIMS II (Regional Input Output Modeling System II) is one of these models that can be used to estimate the economic impact of the university. It is based on the national I/O model, which is then converted to a regional model by using the location quotient (LQ) as a weighing technique.2 The spending by the various groups—university, employees, students, and visitors—goes through cycles of change resulting in an increase in total output and employment. Other models widely used are IMPLAN and REMI models.3 Multipliers The multiplier seeks to quantify the total changes in the economy resulting from a given economic stimulus. Each multiplier can be viewed as measure of the strength of the economic links between a given sector (for example, education/ECU) and the rest of the regional economy. The greater the size of the multiplier, the greater the impact. For instance, if $1.00 spent by ECU, after a cycle of changes, results in a total spending impact of $2.50, then the output multiplier of ECU’s expenditure would be 2.5. economic impact of many institutions.5 For instance, according to Tripp Umbach, a major consulting firm that has conducted an economic impact analysis of several academic institutions including Penn State, Ohio State, and universities of Alabama (Birmingham), Iowa, and Washington, multipliers for analyzing the impact of state universities can range from 1.8 for local to 2.3 for state impacts.6 Geographic Area One of the major decisions in conducting an impact study is on how to define the geographic area that would be directly impacted by local spending. Although some studies include 29 counties to define eastern North Carolina, for the purpose of this analysis, we decided to define the region to more broadly include all 41 counties east of I-95. These counties accounted for about one-third of the estimated state population in 2009. Some of the counties in this area have historically suffered from decline in both population and economic development. Data on development indicators show that many of the counties in this region lag behind the average for the state in population growth and economic development including per capita income, employment in manufacturing and services, percentage of adults with no high school or college education, and number of physicians and registered nurses per 10,000 population. In the case of ECU, the multipliers were derived from the regional model for eastern North Carolina (the 41 counties east of I-95) estimated for this purpose based on the RIMS II model.4 For instance, the multipliers used for the operations expenditure of the university— nonpayroll spending that includes supplies and materials, services, utilities, etc.—was .35 for indirect effects and .52 for induced effects which, with the original 1.00 direct effect, totals 1.87. This means that for every $1.00 in operation expenses by the university, $1.87 is generated in the eastern North Carolina economy. However, the university has many different activities and groups (faculty, staff, students, and visitors) that spend money in Johnston the local economy, and each of these activities Harnett and groups has a unique multiplier, leading to different multipliers across campus. These Cumberland unique multipliers were derived from Sampson Hoke the regional multiplier for eastern North Carolina based on RIMS II Scotland model, and they range from 1.63 Robeson Bladen to 2.47. These multipliers are comparable to the figures recommended by the American Council of Education based on the works of Caffrey and Isaacs and those used in estimating the Columbus Camden Northampton Gates Hertford Halifax Perquimans Bertie Nash Currituck Pasquotank Edgecombe Martin Chowan Tyrrell Washington Dare Wilson Pitt Beaufort Greene Hyde Wayne Lenoir Craven Pamlico Jones Duplin Onslow Carteret Pender New Hanover Brunswick Eastern North Carolina Counties 17 Socioeconomic Profile of Eastern North Carolina NORTH CAROLINA/EASTERN NORTH CAROLINA COUNTIES 74.5% High-School Education or Higher (25+) 78.1% 14.4% North Carolina 9,380,900 Eastern NC Counties 2,657,800 (estimated) (estimated) 2000–09 Population Change 2000–09 Population Change 8.0% 7.2% College Education (25+) 22.5% 0 10 20 30 40 50 60 Percent of Population 70 80 Dropout Rate 8.78 1.54 9.25 1.60 0 Expenditure Per Pupil Demographics Poverty Rate 20.2% 18.32% Unemployment Rate 10.37% 11.06% 30,991 5 10 15 20 25 30 Thousands of Dollars 22.72% 23.8% Service Employment 0 5 10 15 20 Percent of Population 25 6 Primary Care Physicians 31,255 0 13.8% 18.1% Manufacturing Employment 100 Education Per Capita Income 5.01% 4.3% Farm Employment 20 40 60 80 Percent of Students Attending 7 35 68 Registered Nurses 73 0 10 Economy 20 30 40 50 60 Per 10,000 Population 70 80 Health Source: NC State Data Center. Computation by Mulatu Wubneh. Economic Impact Estimates Nonpayroll Direct Spending ECU’s nonpayroll expenditure for fiscal year 2009 was $189 million, which represents about 27 percent of the university’s total expenditure. The $189 million was derived after adjustments were made to exclude scholarships and fellowships (to avoid double counting with student expenditure), and depreciation (which does not show any tangible impacts). The $189 million direct expenditure, after several cycles of change in the economy, will generate a total impact of $354 million and an employment of 4,373. Payroll Impact In 2009, ECU spent a total gross salary and benefits 18 of $466 million, which accounts for more than twothirds of the total university expenditure. Since salary expenses include benefits (about 15 percent), the benefits were excluded to make adjustments. Another important element in estimating the payroll expenses is leakage. In any regional account, a certain amount of the dollar spent locally is “withdrawn” from the responding cycle as a portion of the dollars will “leak” out of the economy. Leakage is often associated with spending for the purchase of goods and services not produced locally, i.e., imports, increased tax payments, and other forms of nonlocal expenditures. The empirical value of “leakage” prevailing in a local economy can vary depending on the size and nature of Nonpayroll Direct Impact Utilities $21,003,280 Capital Equipment* $7,904,000 Services $88,771,320 Supplies and Materials $71,346,640 Indirect $66,801,520 Induced $97,744,950 *Equipment with prices over $500 Total $189,025,240 Total Impact $353,571,710 Total $164,546,470 Employment Impact 4,373 Economic Impact of Employee Spending the local economy and the general economic characteristics of the region. For instance, for areas depending on tourism, the average leakage rate can vary between 30 to 40 percent, leaving a “capture rate” (the percentage of expenditure remaining in the region) of 70 to 60 percent. Based on the Bureau of Labor Statistics (BLS) guidelines for a region, we assume that the “capture rate” of employee expenses in our region is 90 percent. Hence, the total 2009 payroll expenditure after the adjustments have been made was $356 million. The payroll total economic impact amounted to $708 million, and the employment impact was 3,463. Capital Expenditure Indirect $88,174,490 Gross Salary and Benefits $465,888,330 Salary After Adjustments $356,404,570 Total Impact $707,783,840 Induced $263,206,780 Employment Impact 3,463 Capital Expenditure Impact Induced $27,817,060 Indirect $23,588,370 Construction (Average for five years) $56,481,340 Total Impact $107,856,770 Employment Impact 1,170 Since capital projects are financed and depreciated over a long period of time, we decided to use the average figure for the last five years to estimate the impact of capital expenses. ECU spent an average of $56.5 million for capital projects in the last five years, 2006–2010. The total economic impact based on the average capital expenditure was $108 million and the employment impact was 1,170. Student Spending The student spending is estimated by using data from the Financial Aid office that is used as a guide to expected educational expenses to attend ECU. The figures are based on staff estimates, feedback from students, and national trends on the cost of education. Annual adjustments are made to reflect increase in cost of education. The Financial Aid office figures disaggregate expected expenses for campus residents, noncampus 19 Student Spending Impact Induced $164,294,570 Undergraduate $249,622,840 Indirect $102,324,400 Graduate (including medical students) $84,989,320 Total Impact $601,231,140 Employment Impact 7,787 Visitor Spending Impact V I S I T O R S O F : figures for 2009, the study calculated the number of students residing off campus (commuters) and those taking distanceeducation classes. Student spending impacts various businesses including food services, food and drink establishments, retail, rental and real estate, amusement and recreation, and accommodation. The total impact on these sectors reflects the economic impact of student spending. Assuming that student purchases are made within the region and that expenditures are school-related, cost-of-living expenses such as food, clothing, transportation, etc., the study estimates that the total impact of student spending is $601 million and it supports 7,787 employees. Visitors Spending Induced $16,279,420 Undergraduate Students $27,680,820 Graduate Students $3,996,420 Faculty $1,532,520 Total Impact $63,722,890 Employment Impact 792 residents, and undergraduate and graduate distanceeducation students. Similarly, costs for medical students were derived from the Brody School of Medicine’s financial-aid data that was averaged over four years of medical school. The use of estimated cost-of-education figures—in cases in which survey data on student expenses are not readily available—is a common practice in university economic impact assessment. This method has been used in the economic impact studies of other institutions including Boston University, Notre Dame University, and Bowling Green University, to name a few. Data on the number of students residing on campus was provided by ECU Campus Living. Based on enrollment 20 Indirect $14,233,700 Estimating visitors spending is often a difficult challenge because of problems with developing accurate numbers of visitors attending various university events—academic, athletics, community, and cultural activities. To get an accurate estimate, one has to conduct a survey; but often, cost considerations preclude the survey approach. An alternative option for estimating visitors spending in a regional university would be to base it on the number of visitors per student and faculty member. The number of visitors for students and faculty are used as a proxy for all visitor categories. While the student visitors may include parents, other family members, and friends, faculty visitors may include professional colleagues attending conferences, seminars, and other academic activities sponsored by faculty. Per capita student and faculty visitors approach is used in other studies including those mentioned above: Boston, Notre Dame, and Bowling Green (OH). Based on figures used in the impact studies on the above universities, it is assumed that, on the average, undergraduate students have six overnight visitors, graduate students have three overnight visitors, and faculty have four overnight visitors in a given academic year. Since staff visitors are assumed to stay with friends rather than in a hotel, they are not included in the analysis. The figures for graduate students and faculty are smaller because it is assumed that some of these overnight visitors may be staying as guests in faculty and graduate studentsâ€™ residences. Based on 2009 enrollment data and daily expense estimates from the North Carolina Division of Tourism, Film, and Sports Development and the Greenville Convention and Visitors Bureau, this study estimates that visitors spending would amount to $64 million per year. Since visitors spending impacts primarily sectors such as retail, hotel and other accommodation services, and ground transportation, we used the impact on these sectors to estimate the total economic and employment impact generated by visitors. Although visitors-spending impact shows the total for the various types of university activities, it is possible to divide the total impact into those impacts based on athletics and nonathletics events spending as indicated below. Athletics Spending Based on information provided by the ECU Athletics Office, total attendance for football home games for 2009 was 259,143. This represents an average attendance of 43,000 per game for six home games. A breakdown of the attendance shows that about 10,000 (23 percent) were students, 22 percent were locals, 51 percent were day-trip visitors, and 4 percent were overnight guests. Overnight attendees were estimated based on local hotel occupancy rates to separate those staying with a friend or relative and those staying in a commercial accommodation/hotel. The point of using these various assumptions is to reach a reasonable estimate for each category of attendees. Based on cost estimates provided by the NC Division of Tourism, Film, and Sports Development and the Greenville Convention and Visitors Bureau, we estimated the total expenditure for each of the three groupsâ€” Athletics Activities Spending Impact Football Spending $12,862,060 Total Impact $22,084,160 Other Sports Spending $6,603,070 Total Impact $11,349,360 Induced $5,018,780 Indirect $4,203,320 Employment Impact 307 Induced $2,576,520 Indirect $2,169,770 Employment Impact 157 Nonathletics Activities/Events Spending Impact Total Spending $13,744,620 Total Impact $30,289,360 Induced $8,684,130 Indirect $7,860,610 Employment Impact 328 21 local, day-trip, and overnight attendees. Similarly, we used the attendance figures for other nonfootball sports to calculate the total expenditure for local and day-trip groups. In contrast to football, we assumed that there are no overnight attendees for other sports. Specific assumptions related to the proportion of in- and out-oftown attendees had to be made because of the nature of the sport. The chart on page 21 gives the total spending of football and other sports, and the resulting income and employment impacts. campus visits by prospective students and their parents, commencement, and other student-focused activities. Since it is very difficult to estimate the total spending by visitors to these kinds of activities, we used the indirect method of estimating visitors spending based on the number of visitors per student and faculty member. The assumption is that the total of athletics and nonathletics events spending equals total spending by visitors. Summary The total dollar value of output and employment impact of ECU equals the impact generated by the different groups—nonpayroll university, employee, capital, students, and visitors spending as shown below. Nonathletics Events/Activities Spending ECU has a number of nonathletic events organized by various departments and colleges in the form of music and other cultural activities, scientific lectures, seminars, Summary DIRECT/INDIRECT/INDUCED / $ TOTAL / EMPLOYMENT TOTAL Nonpayroll Spending $353,571,710 / 4,373 $707,783,840 / 3,463 Employee Spending $107,856,770 / 1,170 Capital Expenditure $601,231,170 / 7,787 Student Spending $63,722,930 / 792 Visitors Spending 0 100 200 300 400 500 Millions of Dollars ECU and Return on Investment to the State As a result of expenditures on goods and services by the university and its constituents, the overall economic impact of ECU’s operations on eastern North Carolina in 2009 was $1.834 billion with a multiplier of 1.8. Based on this, one can estimate the return on investment to the $242 Million State Appropriations 22 600 700 800 state of North Carolina. In 2009, ECU received $242 million in state appropriations from the state, and the total statewide economic impact of the university for the same period was $3.301 billion. Hence, the return on the state’s investment would be $13.64 for every $1.00 of state appropriations. $3.3 Billion ECU’s Economic Impact to the State Part Four: ECU in the Community T rue to its motto, Servire, meaning To Serve, ECU makes a concerted effort to contribute positively to sustainable development in eastern North Carolina. Its mission focuses on preparing the leaders of tomorrow, meeting the demand for more teachers and health professionals, promoting economic development, and improving the quality of life of the people in the region. These tangible benefits will be realized as ECU continues to make a qualitative transformation of its academic programs and strives to become a “model” institution that is willing to engage nationally and globally. The following discussion highlights the major economic impacts that are often not captured by using standard economic models. Human Capital and Economic Prosperity • The liberal arts and basic science foundation programs prepare graduates to pursue further graduate education or to assume leadership positions in their communities. • Promoting economic development in the region is a major mission of ECU; many of the graduates from professional programs such as business, technology and engineering, communications, and human ecology are playing a leading role in building sustainable development in the region. • ECU’s College of Business is one of four (along with UNC–Chapel Hill, NC State University, and Fayetteville State University) MBA programs in the state offered fully online and accredited by the Association to Advance Collegiate Schools of Business (AACSB). There are 18 AACSB-accredited MBA programs in the state. • ECU’s distance-education program is opening doors for more than 6,000 students who otherwise might not have the opportunity to attend regular classes because of distance, family commitment, or work responsibilities. • The engagement and outreach program (initiated in 2008) has made a major stride in graduating students who are playing major roles in their communities—addressing problems related to improving educational systems, disaster preparedness, and assistance for migrant workers. Teachers The College of Education is one of the oldest academic units on ECU’s campus. Prior to 1967, ECU was largely known as a teacher-training college. Today, the College of Education has programs that focus on training teachers, counselors, administrators, and educational leaders who play a major role in meeting the educational manpower needs of the state. Teachers from ECU per School District Percentage of ECU Teachers 0 11–20 1–5 21–30 6–10 31–40 41+ 23 ECU MDs Residence by County Total Number of ECU MDs 0 11–20 1–5 21–30 6–10 31–40 • The ECU College of Education prepares more teachers than any other institution in the North Carolina highereducation system. • In some of the counties in the East—Beaufort, Greene, Lenoir, Martin, and Pitt—more than 60 percent of the teachers working in the school system are ECU graduates. • Overall, in nearly 40 percent of the counties in the East, one out of every three teachers is an ECU graduate. Health Professionals Historically, eastern North Carolina has lagged behind the rest of the state in the availability of health professionals such as doctors, nurses, and other health-service workers. Some of the counties in the East are also leading the nation in incidence of heart disease, diabetes, and other metabolic illnesses. In the early 1970s, the state legislature charged ECU to play a major role in improving the supply of trained health professionals in the East. Accordingly, ECU initiated a number of health-related programs to train these health professionals. The result has been a significant improvement in the supply of health professionals in the region as illustrated below. • Since 1977, when the Brody School of Medicine enrolled its first class, more than 1,900 physicians have graduated from the school and about 60 percent of these graduates are residing in the state. • If “other alumni” (those who completed their medical residency at Brody, those with PhDs, and master’s degrees in public health) are taken into account, the 24 41+ total number of health-related professionals trained at ECU reaches 3,300. • A general distribution of the physicians shows that a majority of the graduates reside in the East as well as in the Piedmont area. • The Brody School of Medicine is also becoming the “health-care safety net” in eastern North Carolina; it provides more than $150 million per year in uncompensated care. • ECU is a pioneer in the use of modern technology to improve the quality of health services. Today, the ECU medical school is a leader in robotics and one of only a few sites training surgeons to use the da Vinci surgical system. Da Vinci allows doctors to perform roboticassisted heart surgery without having to perform an open-heart operation. This procedure is internationally recognized as being innovative and revolutionary. • Between 2000–2009, more than 1,000 doctors and nurses in the United States and more than 80 physicians and other surgical teams from various countries— including Australia, Canada, Italy, Japan, Korea, Singapore, Taiwan, and Thailand—have received training at ECU in the use of the da Vinci system. • The College of Nursing is the oldest professional health-related academic program at ECU, dating back to 1959. Today, the college offers bachelor’s, master’s, and doctoral degrees in various fields of nursing. During the last half-century, more than 6,000 students have graduated from the college. • ECU’s nursing program is known for its quality and the success of its graduates in improving the health Distribution of ECU Nursing Graduates Working in the State Percentage of nurses with bachelor’s degrees who graduated from ECU (Number of counties) No Active BSNs (17) 1 to 4 percent (29) 5 to 14 percent (20) 15 to 49 percent (28) 50 percent or more (6) Data include active, in-state RNs licensed in NC as of October 31, 2006, who obtained a bachelor of science in nursing (BSN) from ECU. Source: Cecil G. Sheps Center for Health Services Research, University of North Carolina at Chapel Hill. conditions of their communities. About 96 percent of nursing graduates pass the state exam on their first attempt to become registered nurses. • The ECU nursing program prepares the largest number of nurses in the state system. In terms of contributions to the region, in several of the counties in the East, more than half of the nurses working are ECU graduates, and a majority of these graduates work in the counties in eastern North Carolina. Arts, Culture, and Entertainment • ECU is vital to the region for the artistic and other cultural services that it offers as part of its public service programs. • Many of ECU’s programs in arts, music, and dance play a major role in providing world-class entertainment and inspiration to the region. • In 2009, the School of Music organized 34 ticketed activities in jazz, opera, and a variety of other music programs that generated more than $52,000. It also held more than 80 nonticketed activities related to concerts, music festivals, and childrens’ music programs. Research and Creative Activity ECU’s commitment to scholarly research and creative activity is based on the belief that a university should play a major role in creating and disseminating knowledge and information to address communities’ problems and creating new products, new businesses, and new jobs. ECU’s research enterprise contributes to local economic vitality and problem solving related to medical sciences, physical sciences, business, and social sciences. It also gives students the opportunity to work with faculty on cuttingedge research, an experience that enhances students’ capacity to conduct research independently. Research at ECU is contributing significantly as illustrated below. • In 2009, ECU received a total of $48.7 million in grants and contracts from various federal, state, and private organizations to fund faculty and student research and creative activities. • ECU spent $41 million in research in 2009–2010, an increase of 44 percent compared to figures in 2004– 2005. • As ECU continues to promote research and scholarly activities, faculty output in the form of peer-reviewed publications, exhibits, performances, and other creative activities has shown an increasing trend. For instance, in two years (2007–2009), the number of peer-reviewed journal articles has increased by 25 percent. • ECU’s research enterprise has been responsible for the development of products, including the SpeechEasy, an anti-stuttering device; the pulsatile pump (improves pulse flow in dialysis process); and the laser tweezers system (useful in diagnosis of cellular disorder). • For the period 2007–2009, ECU reported 37 new inventions, five new U.S. patents, and nine new U.S. patent applications filed. 25 Conclusion E CU has a long history of active participation in building the economy and cultural life of eastern North Carolina. Today, ECU’s success depends, in many ways, on the continuing success of the East. As the region becomes prosperous and increasingly attractive, ECU becomes more competitive in attracting the finest faculty, students, and staff. This reciprocal relationship in turn enables ECU to contribute even more to the region. This partnership has strong roots and a promising future as ECU and the region look for new shared directions toward improving the economy and quality of life of the people of eastern North Carolina. Great universities—like the communities and regions of which they are an integral part—are constantly changing. During the past decade, ECU has undergone a qualitative transformation. The key factors to this transformation have been the significant growth in enrollment; the development of the health-science programs (including the medical school and the various health-science programs); ECU’s decision, through its distanceeducation program, to open doors to those looking for alternative ways to enroll in classes; the development of 26 new and more specialized graduate programs (PhDs in microbiology and immunology, and coastal resources management; MS in biomedical science, software engineering, and security studies) to produce graduates who are prepared to work in emerging industries; and the adoption of a strategic plan focused on public service and regional transformation. As ECU looks forward to the next century, its commitment to quality education and the desire to solidify its partnership with the East will continue. As a major recipient of state funding; an employer, purchaser of goods and services, and sponsor of major construction projects; a regional center for attracting quality students, faculty, and staff; and an institution with the potential to create specialized programs that can meet the demand for professionals with specialized skills; ECU will continue to sustain the strong link it shares with the East. More importantly, ECU takes its motto, Servire (To Serve), seriously and will continue to play a major role in solidifying its partnership and in building sustainable communities in the region. Notes 1 There are two major methods that are often used to analyze university economic impact studies. The first group includes the direct method, also known as the American Council of Education (ACE) method. This method estimates impact based on detailed available data and information collected by surveying different groups such as students, faculty, and other employees. The second method is the indirect method, which includes the input/output model and the Ryan Shortcut model. Both methods use secondary data to estimate, in an indirect way, the impact upon local economy. The Ryan Model is a simplified version of the ACE model. It uses existing local, regional, and national resources instead of surveying students and employees. For more on the different methods, see Ruben Garrido-Yserte and Maria T. Gallo-Rivera, “The Impact of the University Upon Local Economy: Three Methods to Estimate DemandSide Effects.” Annals of Regional Science, Vol. 44, 2010, pp. 39–67. RIMS II is a regional accounting model based on the national I/O table developed by the Bureau of Economic Analysis (BEA) of the US Department of Commerce. RIMS II has been used by a number of national agencies such as the Nuclear Regulatory Commission, the Department of Housing and Urban Development (HUD), and the Department of Defense (DOD). For more on RIMS II, see “Regional Economic Accounts” by BEA. www.bea.gov/regional/ rims/brfdesc.cfm. 2 For a comparative analysis of the three models, see Lynch, Tim. “Analyzing the Economic Impact of Transportation Projects Using RIMS II, IMPLAN and REMI.” Institute for Social Science and Public Affairs, Florida State University, 2000. 3 The derivation of the multipliers was carried out by the BEA of the US Department of Commerce, December, 2010. 4 Caffrey, John and Isaacs, H. “Estimating the Impact of a College or a University on the Local Economy,” American Council of Education, 1971. 5 See “The Economic Impact of the University of Alabama (Birmingham),” November 2010. www.uab. edu/impact. McFarland suggests that if the impact study of a college or a university is restricted to local service area or local counties, a multiplier ranging from 1.8 to 2.2 would be appropriate. On the other hand, if the local area includes the entire state, as in the case of state-supported institutions, a multiplier ranging from 2.4 to 3.0 is recommended. See MacFarland, Thomas. “Guidelines on how to Prepare an Economic Impact Study of an American College or University using Integrated Postsecondary Education Data System,” 1999. www.nyx.net/~tmacfarl/eco_impa.ssi 6 27 Appendix Model T his study is based on RIMS II, a regional input/output model, developed by the Bureau of Economic Analysis of the US Department of Commerce. The model uses the national I/O as a benchmark and derives regional I/O multiplier tables. For the purpose of this study, regional I/O multipliers were generated by BEA for the 41 eastern North Carolina counties. For more on the model, see www.bea.gov/ regional/rims/index.cfm. Methodology and Data Source Annual economic impacts are grouped into two major categories: Direct Impact Direct impact represents the first-rounding of actual spending by the university operations, capital costs, and spending by students, faculty and staff, and visitors. Data on university operations and capital costs were derived from the ECU Office of Administration and Finance. The spending by faculty and staff was based on payroll data. The estimate on student spending was based on nontuition cost to attend ECU suggested by the Office of Financial Aid. The cost varies depending on whether the student lives on or off campus. A breakdown of the oncampus versus the off-campus students was provided by Campus Living and Student Affairs. Indirect and Induced Impacts These impacts represent the “multiplier” effects, and reflect the recirculation of direct spending throughout the economy. The combination of the direct, indirect, and induced impacts equals to the total annual economic impact of ECU on the regional economy. Data on visitors spending were derived based on an indirect method that took into account the number of 28 visitors per student and faculty. This method is commonly used in studies where survey data on student and faculty expenditures are not available. Figures on daily expenses by visitors were derived from estimates by the North Carolina Division of Tourism, Film, and Sports Development (NCTFSD) and local hotel occupancy rates were based on a sample survey of local hotels conducted by the Greenville Convention and Visitors Bureau. The information on visitors spending was further disaggregated into athletics and nonathletics event visitation spending to determine the impact of athletic and nonathletic activities. Athletics events visitation spending was estimated based on attendance for football and other sports (baseball, basketball, and softball) games as provided by the Athletics Office. In general, the attendance figures could be grouped into three categories—local (from around Pitt County), day trip (outside Pitt County, but within driving distance), and overnight (those staying in hotels). In 2009, total football attendance for six home games was 259,143, of which 23 percent were students, 22 percent were local, 51 percent were day trip, and 4 percent were overnight staying in hotels. Student athletics spending was excluded to avoid double counting with student expenditure. The spending by other groups (local day trip and overnight) was estimated based on rates from the NC-TFSD and the Greenville Convention Center and Visitors Bureau. Other sports visitation spending was also estimated based on attendance and daily expense rates. Similarly, nonathletic spending was derived based on the number of visitors per student. It is assumed that the sum of the athletic and nonathletic events spending equals total spending by visitors. Data The data include number of students by place of residence and nontuition expense rates, overnight visitors’ days, estimated daily expenses, athletic attendance, university revenue and expenditures, and multipliers based on RIMS II model for 2007 for eastern North Carolina. Multipliers RIMS II Multipliers (2007) Total Multipliers for Output and Employment by Industry in Eastern North Carolina (only for selected industries) Total Output Employment Industry (Dollars) (Jobs) 1. Crop and animal production 2.0367 12.5734 2. Forestry, fishing, and related activities 2.4722 23.1159 6. Utilities 1.4086 7. Construction 1.9096 8. Wood product manufacturing 2.333 17.286 17. Furniture and related product manufacturing 1.882 15.4586 6.5849 20.781 19. Food, beverage, and tobacco products 1.9121 9.5823 20. Textile and textile mill products 2.149 13.3661 22. Paper manufacturing 1.9099 10.2956 23. Printing and related support activities 1.7886 13.9076 27. Wholesale trade 1.593 11.7453 28. Retail trade 1.6600 21.3771 16.1466 29. Air transportation 1.7405 32. Truck transportation 1.8294 17.5823 33. Transit and ground passenger transportation 1.7997 24.8183 19.8686 35. Other transportation and support activities 1.8219 36. Warehousing and storage 1.8528 21.3218 37. Publishing industries, except Internet 1.6268 10.7412 40. Telecommunications 1.5563 7.9185 41. Internet and other information services 1.5891 10.3491 47. Rental and leasing services and lessors of intangible assets 1.653 14.4832 48. Professional, scientific, and technical services 1.7349 16.5728 50. Administrative and support services 1.7159 32.9362 52. Educational services 1.8717 24.301 54. Hospitals 1.8248 17.3982 55. Nursing and residential care facilities 1.8142 30.4327 56. Social assistance 1.7303 30.1185 57. Performing arts, spectator sports, museums, zoos, and parks 1.6663 22.7441 58. Amusements, gambling, and recreation 1.6875 27.7898 59. Accommodation 1.6298 21.4193 60. Food services and drinking places 1.7585 30.5453 61. Other services 1.7552 22.1177 62. Households 1.9859 9.9585 Note: Only selected industries are shown. Total sample includes 62 industries with Type I and Type II multipliers. Source: Regional Input-Output Modeling System (RIMS II), Regional Product Division, Bureau of Economic Analysis 29 ECU Revenue and Expenditures REVENUES 2009 Operating Revenues Student Tuition and Fees, Net $125,070,005.03 Patient Services, Net $145,123,491.48 Federal Grants and Contracts $18,478,012.72 State and Local Grants and Contracts $10,989,163.47 Nongovernmental Grants and Contracts $11,454,253.04 Sales and Services, Net $86,465,603.88 Interest Earnings on Loans $477,401.93 Other Operating Revenues $1,874,049.62 Total Operating Revenues $399,931,981.17 Expenses Operating Expenses Salaries and Benefits $465,888,330.09 Supplies and Materials $71,346,643.53 Services $88,771,315.60 Scholarships and Fellowships $28,707,259.83 Utilities $21,003,284.52 Depreciation Total Operating Expenses Operating Loss $19,257,752.99 $694,974,586.56 ($295,042,605.39) Nonoperating Revenues (Expenses) State Appropriations $241,751,812.61 State Aid: Federal Recovery Funds $6,549,955.00 Noncapital Grants: Federal Student Financial Aid $18,356,353.31 Other Noncapital Grants $14,293,738.91 Noncapital Gifts $12,347,457.44 Investment Income (Net of Investment Expense) $2,437,654.85 Interest and Fees on Debt Other Nonoperating Expenses Net Nonoperating Revenues Loss Before Other Revenues (Expenses) State Capital Appropriations ($2,694,152.84) $288,933,962.49 ($6,108,642.90) $39,259.86 Refund of Prior Years Capital Appropriations ($2,269,900.00) Capital Grants $24,857,533.85 Capital Gifts $2,407,048.96 Increase in Net Assets $18,925,299.77 Source: ECU Administration and Finance 30 ($4,108,856.79) Number of Students by Place of Residence and Nontuition Cost of Attending ECU, 2009 Undergraduate Number of Annual Expense Students Percent (Nontuition) On-campus residents 4,988 23 Off-campus residents 13,620 63 $11,136 Distance-education students 2,850 13 $13,370 Subtotal 21,458 $11,998 100 Graduate On-campus residents 20 Off-campus residents 2,652 20 $13,370 Distance-education students 3,220 45 $13,370 Subtotal 5,892 Medical School Total Students 0.3 $13,370 100 304 $20,570 27,654 Note: Expense figures for off-campus and graduate students are adjusted to reflect increase in trasport cost. All graduate students are assumed to be off-campus residents. For financial aid data of Main Campus as well as that of Brody School of Medicine, see ECU website of the respective offices. Number of Visiting Days Based on Enrollment Data Visiting Number of Overnight Visiting Days* Undergraduate students Graduate students Faculty Total days 128,748 18,588 7,128 154,464 *Based on visitors per student and per faculty Athletics Attendance Sport Attendance Football (6 home games) 259,143 Basketball, men (14 games) 52,500 Basketball, women (14 games) Baseball Softball total 27,090 120,840 7,720 467,293 Source: ECU Athletics Office. See also www.ecupirates.com Daily Expense Rates for Visitors Type Transport Lodging Expenditure per Visit $15.00 $116.00 Entertainment $25.00 Food/Beverages $34.00 Shopping $25.00 Total $215.00 Based on NC-TGSD and Greenville Convention Center and Visitors Bureau data 31 For more information, please contact the Office of the Chancellor at 252-328-6105. East Carolina University is committed to the equality of educational opportunity and does not discriminate against applicants, students, or employees based on race, color, national origin, religion, gender, age, creed, sexual orientation, or disability. An equal opportunity/affirmative action university, which accommodates the needs of individuals with disabilities. U.P. 11-282 Printed on recycled paper with nonstate funds.