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 ECU'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 �Withatotalemploymentof 5,343in2009,ECUis the second-largest employer in Pitt County behind Pitt County Memorial Hospital. �Factoringdirectspendingbytheuniversityandits constituents (students, faculty, staff, and visitors), and "themultipliereffect"oftheirspending,ECUin2009 generatedatotaleconomicimpactof $1.834billionin eastern North Carolina with a multiplier of 1.8. This impact translates into a total statewideoutputimpactof $3.3billion. �Abreakdownoftheimpactshowsthat employeespendingaccountedfor39 percent;students,33percent;university (nonpayrollspending),19percent;capital expenditure,6percent;andvisitors,3 percent of the total economic impact. �Thetotalemploymentimpactof spending by the university and its constituents in 2009was17,585. �Inthelastfiveyears(2006�2010),ECU spentanaverageof $56.5millionperyear on construction, directly generating 1,170 jobs. Total capital expenditure for the five years amounted to $282 million. �Intermsofregionalimpact,about50 percent of the payment for capital expenses was made to vendors with an eastern North Carolina location. �Intermsof returnsoninvestment,ECUgeneratesa totalof $13.64foreachdollarinvestedbythestate. Summary of Economic Impact Visitors Spending $63,722,930 792 KEY Category $ Impact Employment Impact 3.5% Nonpayroll Spending $353,571,710 4,373 19.3% Student Spending $601,231,170 7,787 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 �Withanenrollmentof morethan27,000students, ECU is the third-largest institution in the University of North Carolina system. �ECUhas13collegesandschoolsprovidingprograms in education, humanities, social sciences, and several professional programs including business, nursing, medicine, technology, and engineering. �Infiveyears(2005�2009),ECUhasgraduatedan averageof 4,800studentsayear. �ECUcontributestothedevelopmentof humancapital by training community and business leaders, teachers, and health-care professionals as illustrated below: n Outof ECU's123,000livingalumniwhose addresses are known, more than 70 percent live in NorthCarolina;58percentof theseareintheEast. 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 nearly40percentof thecountiesintheEast,onethird of the teachers are ECU graduates. 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 Sinceitsopeningin1977,theBrodySchoolof Medicinehasgraduatedmorethan1,900physicians; 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 �ECUplaysanimportantroleinsustainingavibrant cultural community in the region. Through its fine arts programs,theSchoolof Musicin2010organized34 ticketedand84nonticketedactivitiesinjazz,opera, concerts, music festivals, and children's music programs. �ECUspent$41millioninresearchin2009�2010, anincreaseof 44percentcomparedtofiguresin 2004�2005. �Fortheperiod2007�2009,ECUreported37new inventions, five new U.S. patents secured, and nine new U.S. patent applications filed. 6 ECU's Economic Impact on the Region and the State E through an ongoing supply of skilled professionals in the form of doctors, nurses, teachers, and other business and ven as East Carolina University has grown to a community leaders. It also improves the quality of life nationally recognized research university, its focus for the people in the East through a variety of activities has remained on improving the quality of life in easternNorthCarolina--all41countieseastof I-95--by in the form of uncompensated health services; volunteer work of its employees and students; athletics, musical, and acting as a major employer, purchaser, and provider of other cultural events; and scientific lectures, workshops, services across the region. The university is dedicated to seminars, and other continuing education programs. This having a direct, vital influence on the region of its roots study explains some of these services under the section and is focused on creating economic prosperity. It is a "ECU in the Community." direction shared with the region we call home. The study is organized into four parts. Part One sets The following is an analysis of a study of the economic impact of East Carolina University (ECU) on the state of the stage with an introduction of current conditions at ECU. Part Two highlights the operation of the university, North Carolina and eastern North Carolina in particular. and Part Three estimates the indirect and induced or The objective is to quantify the economic influences "multiplier" effects of the university's and its constituents' of ECU on the East through the various activities and spending in eastern North Carolina. Most data used in operations of the university. The direct expenditure by thestudyarefrom2009,themostcomplete,up-to-date the university and its constituents (faculty, staff, students, information available. Part Four discusses the role of ECU and visitors) translates into increased economic activities in building sustainable communities--helping improve the resulting in growth in income and employment. By using quality of health and education, expanding educational a standard economic model, this study estimates the total economic impact of ECU on the eastern part of the state. opportunities, and supporting the development of local businesses and other communities. The conclusion Much like other academic institutions, ECU generates projects the future by identifying the main reasons ECU's additional economic impacts that are often difficult to contributions to the growth of the economy of the East quantify and hence are not captured by using dollar could be even greater in the years ahead. values. ECU contributes to the state's economic growth Introduction: The Report 7 Part One: Background O ECU as an Institutional Enterprise 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 stateof NorthCarolina,with13collegesandschools. 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 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: �producemoreandbetterteachersanddevelopbest practices to improve public education in North Carolina, �fosterstudentaccessandsuccessalongtheentireprekindergarten�20educationalcontinuum, �expandandapplyitsexpertise,research,andoutreach functions to address regional and statewide problems related to the economy, the environment, energy, and water, among other topics, �increasefacultyandstudentknowledge,motivation,and capacity for scholarly instruction and learning, research, and engagement, At the core of ECU's mission is public service and regionaltransformation.Inthefallof 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 innovation, investment, and outreach �producemoreandbetterphysicians,dentists,nurses,and allied-health professionals to meet the expanding needs �Health Care and Medical Innovation: Saving lives, of North Carolina and beyond, curing diseases, and positively transforming the quality of health care for the region and the state �createvibrantandlivablecommunitiesthroughthearts, athletics, and other cultural enrichment, and �The Arts, Culture, and Quality of Life: Providing world-class entertainment and powerful inspiration as we �produceundergraduateandgraduatestudentswiththe work together to sustain and improve the community's skills, knowledge, expertise, and entrepreneurial drive quality of life 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, 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 60percentof thestudentsarefemalesand40percentare 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% Medical 1.1% Out-ofstate 12.2% Undergraduate 78% Other* 7.2% Minority 19.6% In-state 87.8% 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 ON-CAMPUS 2000 2001 2002 2003 2004 Year 2005 2006 2007 2008 2009 2010 0 17,851 18,174 18,955 19,374 19,570 19,471 19,891 20,720 21,494 21,584 21,773 5 10 OFF-CAMPUS 899 1,238 1,622 2,382 3,197 3,693 4,460 5,270 6,183 6,070 6,100 20 25 30 18,750 19,412 20,577 21,756 22,767 2 3 ,1 6 4 24,351 25,990 2 7, 6 7 7 2 7, 6 5 4 2 7, 8 7 3 15 Thousands of Students During the past 10 years, enrollment at ECU has increased atanaverageannualrateof 4percent.Thisincreasehas 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. 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 anaverageof 4,800studentsannually. Health-Related Fields* *Includes medicine, nursing, and allied health 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 2009graduatesshowsthat18percentof thegraduates received their degree in education, 17 percent in arts and sciences,16percentinhealth-relatedfields,13percentin business,11percentinhumanecology,9percentinhealth and human performance, and 8 percent both in technology and computer science, and fine arts and communication. Business 10 Estimates of Work-Life Earnings by Educational Attainment AVERAGE ANNUAL EARNINGS/WORK-LIFETIME EARNINGS High School Diploma Bachelor's Degree Master's Degree Doctoral Degree Professional Degree 0 $25,909 $45,394 $54,547 $81,430 $99,253 1 2 3 Millions of Dollars 4 $1,226,600 $2,140,900 $2,463,100 $3,440,000 $4,411,500 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 wereexpectedtoearnanaverageincomeof $25,909per year, those with bachelor's degrees were expected to earn anaverageincomeof$45,394.Thehigherwage-earning capacity shows that the average worker with a bachelor's degreecanexpecttoearn$914,000morethantheir 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 123,000livingalumniwhoseaddressesareknown,more than70percentresideinNorthCarolina,and58percent 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�99 100�299 300�499 500�699 700�899 900�1,099 1,100+ 11 Prominent ECU Alumni � Rick Atkinson, journalist, author, and three-time Pulitzer Prize winner � 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 � 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 � Chris Johnson, NFL player, 2009 Offensive Player of the Year � Kelly King, CEO, BB&T � James Maynard, founder and CEO of Golden Corral restaurants � 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 � 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 Faculty by Rank, 2009 Other Instructor 14% 1% 34% Assistant Professor Employees by Occupational Category, 2009 Administrators Other 17% 4% 8% Faculty 33% Professor 21% Clerical 21% 30% Associate Professor 25% Professional 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 toincreasethenumberoffacultybyabout3percentper 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 institution.Basedon2009data,thegeneralcharacteristics of thefacultyshowthat21percentareprofessors,30 percentassociateprofessors,34percentassistantprofessors, 14percentinstructors,and1percentother. ECU also employs other individuals with various skills andoccupationalattributes.The2009employment distributionshowsthatwhile33percentarefaculty,25 percentareprofessionals,21percentclerical,4percent administrators, and 17 percent other professionals. 12 Faculty, 2000�2010 2000 2001 2002 2003 2004 Year 2005 2006 2007 2008 2009 2010 0 500 1,300 1,355 1,380 1,463 1,589 1,606 1,700 1,711 1,804 1,782 1,750 1,000 Total Faculty 1,500 2,000 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 employersinthecounty,ECUbringsinabout$696 millionannually,morethan4.0timesthetotalrevenueof that of Pitt County and 8.8 times of that of the City of Greenville. Intermsof employment,with5,343employees,ECU ranks second in the county after Pitt County Memorial Hospital,whichhas7,373employees.In2009,ECUand 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) East Carolina University Pitt County City of Greenville 0 $78 100 200 300 400 500 Millions of Dollars 600 700 800 $172 $696 2009 Comparative Employment FEDERAL, STATE, AND LOCAL/PRIVATE INDUSTRY East Carolina University Pitt County Memorial Hospital 5,343 7,373 50,963 48,669 City of Greenville 23,019 Pitt County 21,150 0 10 20 30 40 50 Thousands of Employees 60 70 80 13 Part Two: Economic Operations of the University E Revenue and Operating Expenditures 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 regionaleconomy.In2009,EastCarolinaUniversity generatedmorethan$696millioninrevenue.Of this, $400millionwasoperatingrevenue,whichcamelargely from student tuition fees (18.0 percent), patient services (20.8percent),auxiliaryservices(12.4percent),and grantsandothercontracts(5.9percent).Withthestate appropriationof$242million(accountingfor35.0 percentoftherevenue),totalrevenueroseto$642 million. The remaining revenues came from gifts, interest earned, and other operating revenues. The2009stateappropriationof $242millionshowsa 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. Intermsof expenditure,in2009,theuniversityspent $695millioninoperatingexpenses.Abreakdownof the expenses into the respective categories shows that a majority of the expenses was for salaries and benefits (67 percent),followedbyservices(13percent)andsupplies and materials (10 percent). Itisimportanttonotethatthe$695milliontotalexpense reflectsthecashoutlayin2009;itdoesnotincludecapital 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 theuniversityin2009was$189million. 2009 Revenue Patient services $145,123.50 20.8% Student tuition and fees $125,070.00 18.0% Auxiliaries $86,465.60 2009 Operating Expenditures Salaries and benefits 67% 12.4% 5.9% 7.9% (gifts, interest earned, other operating revenues) $56,336.70 35.0% Other Grants and contracts $40,921.40 Depreciation Utilities Scholarships and fellowships 3% 3% 4% 10% 13% Services State appropriations $241,751.80 Supplies and materials Total $695,669 Total $694,975 14 Employment and Payroll Capital Costs In2009,ECUpaidout$466millioninsalariesand benefitstoits5,343employees.Theexpenditurebythese employees, along with expenditures by students and visitors, generates additional jobs that support the region'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 in2009)wasmadetovendorswithaneasternNorth Carolina location. 2006�2010 Capital Expenditure 2006 2007 2008 2009 2010 0 $75,701,943.91 $43,531,591.99 $54,276,318.07 $41,222,206.99 $67,674,552.07 10 20 30 40 50 Millions of Dollars 60 70 80 Source: ECU Administration and Finance 15 Part Three: Economic Impact B Economic Impact Analysis 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 Major Components of an Economic Impact � 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. Nonpayroll Expenditure Employee Spending Student Spending Visitor Spending Capital Expenditure INCOME � Direct � Indirect � Induced Multiplier Effect EMPLOYMENT INCOME IMPACT EMPLOYMENT IMPACT 16 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 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 universitiescanrangefrom1.8forlocalto2.3forstate impacts.6 Geographic Area 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, resultsinatotalspendingimpactof$2.50,thentheoutput multiplierof ECU'sexpenditurewouldbe2.5. In the case of ECU, the multipliers were derived from theregionalmodelforeasternNorthCarolina(the41 countieseastof I-95)estimatedforthispurposebased 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.35forindirecteffectsand.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,andtheyrangefrom1.63 Robeson Bladen to2.47. 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 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 studiesinclude29countiestodefineeasternNorth Carolina, for the purpose of this analysis, we decided to definetheregiontomorebroadlyincludeall41counties eastof I-95.Thesecountiesaccountedforaboutone-third of theestimatedstatepopulationin2009.Someof 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. Northampton Halifax Bertie Nash Edgecombe Martin Wilson Pitt Greene Wayne Lenoir Craven Pamlico Jones Duplin Onslow Carteret Beaufort Hyde Camden Gates Currituck Pasquotank Hertford Perquimans Chowan Tyrrell Washington Dare Pender New Hanover Brunswick Eastern North Carolina Counties 17 Socioeconomic Profile of Eastern North Carolina NORTH CAROLINA/EASTERN NORTH CAROLINA COUNTIES High-School Education or Higher (25+) 74.5% 78.1% 14.4% North Carolina 9,380,900 (estimated) 2000�09 Population Change Eastern NC Counties 2,657,800 (estimated) 2000�09 Population Change College Education (25+) 22.5% 0 10 20 30 40 50 60 Percent of Population 70 80 8.0% 7.2% Dropout Rate 8.78 9.25 0 1.54 1.60 Expenditure Per Pupil 20 40 60 80 Percent of Students Attending 100 Demographics Poverty Rate Unemployment Rate Farm Employment Manufacturing Employment Service Employment 0 Education 20.2% 18.32% 10.37% 11.06% 5.01% 4.3% 13.8% 18.1% 22.72% 23.8% 5 10 15 20 Percent of Population 25 Per Capita Income 0 30,991 31,255 5 10 15 20 25 30 Thousands of Dollars 35 Primary Care Physicians 6 7 68 73 0 10 20 30 40 50 60 Per 10,000 Population 70 80 Registered Nurses Economy Source: NC State Data Center. Computation by Mulatu Wubneh. Health Economic Impact Estimates Nonpayroll Direct Spending ECU'snonpayrollexpenditureforfiscalyear2009was $189million,whichrepresentsabout27percentof theuniversity'stotalexpenditure.The$189millionwas derived after adjustments were made to exclude scholarships and fellowships (to avoid double counting with student expenditure), and depreciation (which does not show any tangibleimpacts).The$189milliondirectexpenditure, after several cycles of change in the economy, will generate a totalimpactof$354millionandanemploymentof4,373. Payroll Impact In2009,ECUspentatotalgrosssalaryandbenefits of $466million,whichaccountsformorethantwothirds of the total university expenditure. Since salary expensesincludebenefits(about15percent),thebenefits 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 18 Nonpayroll Direct Impact Capital Equipment* $7,904,000 Indirect $66,801,520 Utilities $21,003,280 Services $88,771,320 Supplies and Materials $71,346,640 Induced $97,744,950 *Equipment with prices over $500 Total $189,025,240 Total $164,546,470 Total Impact $353,571,710 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 leakageratecanvarybetween30 to40percent,leavinga"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 inourregionis90percent.Hence, thetotal2009payrollexpenditure after the adjustments have been made was$356million.Thepayrolltotal economic impact amounted to $708 million, and the employment impact was3,463. Capital Expenditure 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 $56.5millionforcapitalprojectsin thelastfiveyears,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 Indirect $88,174,490 Gross Salary and Benefits $465,888,330 Salary After Adjustments $356,404,570 Induced $263,206,780 Total Impact $707,783,840 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 19 Student Spending Impact Induced $164,294,570 Indirect $102,324,400 Undergraduate $249,622,840 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 : figuresfor2009,thestudy 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 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. Induced $16,279,420 Indirect $14,233,700 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 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 20 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 students' residences. Basedon2009enrollmentdataand 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 wouldamountto$64millionper 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 forfootballhomegamesfor2009was 259,143.Thisrepresentsanaverage attendanceof43,000pergamefor six home games. A breakdown of the attendance shows that about 10,000(23percent)werestudents, 22percentwerelocals,51percent wereday-tripvisitors,and4percent 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 groups-- Athletics Activities Spending Impact Football Spending $12,862,060 Induced $5,018,780 Indirect $4,203,320 Total Impact $22,084,160 Employment Impact 307 Other Sports Spending $6,603,070 Induced $2,576,520 Indirect $2,169,770 Total Impact $11,349,360 Employment Impact 157 Nonathletics Activities/Events Spending Impact Total Spending $13,744,620 Induced $8,684,130 Indirect $7,860,610 Total Impact $30,289,360 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. 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, 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. Summary DIRECT/INDIRECT/INDUCED / $ TOTAL / EMPLOYMENT TOTAL Nonpayroll Spending Employee Spending Capital Expenditure Student Spending Visitors Spending 0 $63,722,930 / 792 100 200 300 400 500 Millions of Dollars 600 700 800 $107,856,770 / 1,170 $601,231,170 / 7,787 $353,571,710 / 4,373 $707,783,840 / 3,463 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 2009was$1.834billionwithamultiplierof 1.8.Based on this, one can estimate the return on investment to the stateof NorthCarolina.In2009,ECUreceived$242 million in state appropriations from the state, and the total statewide economic impact of the university for the sameperiodwas$3.301billion.Hence,thereturnonthe state'sinvestmentwouldbe$13.64forevery$1.00of state appropriations. $242 Million State Appropriations $3.3 Billion ECU's Economic Impact to the State 22 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 �ECU'sCollegeof Businessisoneof four(along withUNC�ChapelHill,NCStateUniversity,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'sdistance-educationprogramisopeningdoors 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. �Theengagementandoutreachprogram(initiatedin 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 �Theliberalartsandbasicsciencefoundationprograms prepare graduates to pursue further graduate education or to assume leadership positions in their communities. �Promotingeconomicdevelopmentintheregionisa 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. The College of Education is one of the oldest academic unitsonECU'scampus.Priorto1967,ECUwaslargely 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 1�5 6�10 11�20 21�30 31�40 41+ 23 ECU MDs Residence by County Total Number of ECU MDs 0 1�5 6�10 11�20 21�30 31�40 41+ �TheECUCollegeof Educationpreparesmoreteachers than any other institution in the North Carolina highereducation system. �Insomeof thecountiesintheEast--Beaufort,Greene, Lenoir, Martin, and Pitt--more than 60 percent of the teachers working in the school system are ECU graduates. �Overall,innearly40percentof thecountiesintheEast, 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. Intheearly1970s,thestatelegislaturechargedECU 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. �Since1977,whentheBrodySchoolof Medicine enrolleditsfirstclass,morethan1,900physicianshave graduated from the school and about 60 percent of these graduates are residing in the state. �If "otheralumni"(thosewhocompletedtheirmedical residency at Brody, those with PhDs, and master's degrees in public health) are taken into account, the total number of health-related professionals trained at ECUreaches3,300. �Ageneraldistributionof thephysiciansshowsthata majority of the graduates reside in the East as well as in the Piedmont area. �TheBrodySchoolof Medicineisalsobecomingthe "health-care safety net" in eastern North Carolina; itprovidesmorethan$150millionperyearin uncompensated care. �ECUisapioneerintheuseof moderntechnologyto 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. �Between2000�2009,morethan1,000doctorsand 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. �TheCollegeof Nursingistheoldestprofessional health-related academic program at ECU, dating back to1959.Today,thecollegeoffersbachelor'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'snursingprogramisknownforitsqualityand the success of its graduates in improving the health 24 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. 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. �In2009,ECUreceivedatotalof $48.7millionin grants and contracts from various federal, state, and private organizations to fund faculty and student research and creative activities. Arts, Culture, and Entertainment �ECUisvitaltotheregionfortheartisticandothercultural �ECUspent$41millioninresearchin2009�2010,an increaseof 44percentcomparedtofiguresin2004� services that it offers as part of its public service programs. 2005. �ManyofECU'sprogramsinarts,music,anddanceplay �AsECUcontinuestopromoteresearchandscholarly a major role in providing world-class entertainment and activities, faculty output in the form of peer-reviewed inspiration to the region. publications, exhibits, performances, and other creative �In2009,theSchoolofMusicorganized34ticketed activities has shown an increasing trend. For instance, in activities in jazz, opera, and a variety of other music twoyears(2007 2009),thenumberof peer-reviewed � programsthatgeneratedmorethan$52,000.Italsoheld journalarticleshasincreasedby25percent. more than 80 nonticketed activities related to concerts, �ECU'sresearchenterprisehasbeenresponsibleforthe music festivals, and childrens' music programs. development of products, including the SpeechEasy, an anti-stuttering device; the pulsatile pump (improves Research and Creative Activity pulse flow in dialysis process); and the laser tweezers ECU's commitment to scholarly research and creative system (useful in diagnosis of cellular disorder). activity is based on the belief that a university should play a major role in creating and disseminating knowledge �Fortheperiod2007�2009,ECUreported37new inventions, five new U.S. patents, and nine new U.S. and information to address communities' problems and patent applications filed. creating new products, new businesses, and new jobs. conditionsof theircommunities.About96percent of nursing graduates pass the state exam on their first attempt to become registered nurses. �TheECUnursingprogrampreparesthelargestnumber 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. 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 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. 26 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. 3 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. The derivation of the multipliers was carried out by the BEA of the US Department of Commerce, December, 2010. Caffrey, John and Isaacs, H. "Estimating the Impact of a College or a University on the Local Economy," AmericanCouncilof Education,1971. 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 2.4to3.0isrecommended.SeeMacFarland,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 4 5 6 2 27 Appendix T Model 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 weregeneratedbyBEAforthe41easternNorthCarolina counties. For more on the model, see www.bea.gov/ regional/rims/index.cfm. 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), andovernight(thosestayinginhotels).In2009,total footballattendanceforsixhomegameswas259,143,of which23percentwerestudents,22percentwerelocal, 51percentweredaytrip,and4percentwereovernight 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 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 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. 28 Multipliers RIMS II MuLtIPLIERS (2007) Total Multipliers for Output and Employment by Industry in Eastern North Carolina (only for selected industries) total Output Employment (Dollars) (Jobs) 2.0367 2.4722 1.4086 1.9096 2.333 1.882 1.9121 2.149 1.9099 1.7886 1.593 1.6600 1.7405 1.8294 1.7997 1.8219 1.8528 1.6268 1.5563 1.5891 1.653 1.7349 1.7159 1.8717 1.8248 1.8142 1.7303 1.6663 1.6875 1.6298 1.7585 1.7552 1.9859 12.5734 23.1159 6.5849 20.781 17.286 15.4586 9.5823 13.3661 10.2956 13.9076 11.7453 21.3771 16.1466 17.5823 24.8183 19.8686 21.3218 10.7412 7.9185 10.3491 14.4832 16.5728 32.9362 24.301 17.3982 30.4327 30.1185 22.7441 27.7898 21.4193 30.5453 22.1177 9.9585 Industry 1. Crop and animal production 2. Forestry, fishing, and related activities 6. Utilities 7. Construction 8. Wood product manufacturing 17. Furniture and related product manufacturing 19. Food, beverage, and tobacco products 20. Textile and textile mill products 22. Paper manufacturing 23. Printing and related support activities 27. Wholesale trade 28. Retail trade 29. Air transportation 32. Truck transportation 33. Transit and ground passenger transportation 35. Other transportation and support activities 36. Warehousing and storage 37. Publishing industries, except Internet 40. Telecommunications 41. Internet and other information services 47. Rental and leasing services and lessors of intangible assets 48. Professional, scientific, and technical services 50. Administrative and support services 52. Educational services 54. Hospitals 55. Nursing and residential care facilities 56. Social assistance 57. Performing arts, spectator sports, museums, zoos, and parks 58. Amusements, gambling, and recreation 59. Accommodation 60. Food services and drinking places 61. Other services 62. Households 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 Operating Revenues Student Tuition and Fees, Net Patient Services, Net Federal Grants and Contracts State and Local Grants and Contracts Nongovernmental Grants and Contracts Sales and Services, Net Interest Earnings on Loans Other Operating Revenues TOTAL OPERATING REVENUES $125,070,005.03 $145,123,491.48 $18,478,012.72 $10,989,163.47 $11,454,253.04 $86,465,603.88 $477,401.93 $1,874,049.62 $399,931,981.17 2009 ExPENSES Operating Expenses Salaries and Benefits Supplies and Materials Services Scholarships and Fellowships Utilities Depreciation TOTAL OPERATING ExPENSES Operating Loss $465,888,330.09 $71,346,643.53 $88,771,315.60 $28,707,259.83 $21,003,284.52 $19,257,752.99 $694,974,586.56 ($295,042,605.39) NONOPERAtING REVENuES (ExPENSES) State Appropriations State Aid: Federal Recovery Funds Other Noncapital Grants Noncapital Gifts Investment Income (Net of Investment Expense) Interest and Fees on Debt Other Nonoperating Expenses NET NONOPERATING REVENUES Loss Before Other Revenues (Expenses) State Capital Appropriations Refund of Prior Years Capital Appropriations Capital Grants Capital Gifts Increase in Net Assets Source: ECU Administration and Finance $241,751,812.61 $6,549,955.00 $14,293,738.91 $12,347,457.44 $2,437,654.85 ($4,108,856.79) ($2,694,152.84) $288,933,962.49 ($6,108,642.90) $39,259.86 ($2,269,900.00) $24,857,533.85 $2,407,048.96 $18,925,299.77 Noncapital Grants: Federal Student Financial Aid $18,356,353.31 30 Number of Students by Place of Residence and Nontuition Cost of Attending ECU, 2009 UNDERGRADUATE On-campus residents Off-campus residents Distance-education students Subtotal GRADUATE On-campus residents Off-campus residents Distance-education students Subtotal MEDICAL SCHOOL TOTAL STUDENTS 20 2,652 3,220 5,892 304 27,654 0.3 20 45 100 $20,570 $13,370 $13,370 $13,370 Number of Annual Expense Students Percent (Nontuition) 4,988 13,620 2,850 21,458 23 63 13 100 $11,998 $11,136 $13,370 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 Graduate students Faculty TOTAL DAyS Number of Overnight Visiting Days* 128,748 18,588 7,128 154,464 Athletics Attendance Sport Football (6 home games) Basketball, men (14 games) Basketball, women (14 games) Baseball Softball TOTAL Source: ECU Athletics Office. See also www.ecupirates.com Attendance 259,143 52,500 27,090 120,840 7,720 467,293 Undergraduate students *Based on visitors per student and per faculty Daily Expense Rates for Visitors type Transport Lodging Entertainment Food/Beverages Shopping TOTAL Expenditure per Visit $15.00 $116.00 $25.00 $34.00 $25.00 $215.00 Based on NC-TGSD and Greenville Convention Center and Visitors Bureau data 31 For more information, please contact the OfficeoftheChancellorat252-328-6105. 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.