Holy Cross Economic Impact on Worcester?

The $2BN number for Fairfield is preposterous

if Fairfield has 5,000 students paying $50,000 that's $250MM revenue for the school. Other revenue is likely minimal. How many times does this model say that revenue turns over to generate that total impact?

Money spent in the local community, by students, family, friend, alums and vendors used by the school are all factors normally included in any economic impact study.

Maybe not, but until we know the multiplier effect it is just a wild guess. real estate owned by the school can also be a part of the number

Here is the report


www.theccic.org/Customer-Content/www/CMS/files/EconomicImpact2016/CCIC_ECON_impact_2019_FINAL_Summary.pdf

Continue to color me confused and skeptical. 

I'm not the brightest guy (especially economically) here, but from the study graphic:

By their definition, they seem to come up about $900,000,000 short. 

Even if I add in that 5 year average Capital assets figure of $ 535,921,000, that they somehow show flowing out of the employee, student, and visitor spending you still only get to around $740,000,000. 

Where does the extra $440,000,000 in direct spending come from??

Thank you.

Well, first, the author includes the value of capital assets, which is a huge number relatively speaking.  Capital assets include land, works of art, etc., and buildings.  There is no direct economic impact from a capital asset, per se  IF the author had included the cost of construction put in place during a particular year, I would consider that construction as having a direct economic impact.

Second, the author assumes that all university purchases of supplies, equipment, etc. are bought from firms and businesses located in CT.  That simply is not the case.  I do acknowledge that calculating the value of purchases from CT businesses is difficult to do without sampling a range of procurements to determine which are intra-state in origin, and which are not.  The author's approach is akin to the state of Washington calculating the direct economic impact of Boeing, and positing that the entirety of the plane, --engines, instrumentation, etc., etc., is manufactured solely in Renton and Everett. 

Third, direct spending by employees is very likely overstated.  The value is probably calculated by totaling the wages and compensation paid to an institution's employees.  As such, this would include Federal income taxes, FICA taxes, and employee and institution contributions to an employee's retirement plan, most/all of which do not remain in-state.   A better value would be to total employee gross disposable income, although I concede that's not easily done;  it would take some work.

Interpolating from Fairfield's audited financial report for fiscal 2018, the base salary for all Fairfield employees totaled around $63 million.  This value is higher than the disposable income value, as it would include unpaid income taxes.   The report states that all Fairfield employees spent $100 million.   

Fourth, the multiplier "induced spending" includes the value of capital assets.   Restricting the value of direct spending (with the inherent methodological flaws) to that by the university, students, employees,  and visitors, the total is about $200 billion.  The multiplier value would be about 4x to get to the "induced spending" amount of $795 million.

I could go on, but this report is simply not good scholarship.

Lastly, IMO, the $2 billion number for Fairfield is hogwash, and that also holds true for the listed economic impact values of the other Connecticut private schools.

      

OK. SInce 8485 is now the author of the top thread, he can now be the "owner" of this thread.  

The intent, as the title suggests, was about Holy Cross' economic impact on the community since the College has periodically come under fire for the lack of local taxes paid and the initial link was about the impact of Fairfield University. It was an independent study. Now you guys can slice and dice this study any which way you care to and I, too, took some economics classes at HC (and hated them) but a couple of my takeaways was 1. Economics, despite what economists would like you to believe, is NOT a science and more an art and is subject to many variables and interpretations and 2. As some posted above a dollar earned or spent rolls over many times. I guess if you buy #1, you shouldn't assume #2 is correct.

So, if you all choose to debate the accuracy of this Fairfield report which is simply a subset of a larger report on the financial impact of Connecticut independent colleges, knock yourselves out. 

As as for all you economic experts, it was easy enough to track down the email of the study's author. Why don't you contact him?

1970

First, don't dump this thread on me because you're dissatisfied with the direction the thread took.  You want it to go in a different direction, post something to take it there.  You asked a question in your initial post. I provided an answer.  I suppose there should have been nothing else to say after that, but then, that would make this the Bucknell, the Lehigh, or the Colgate board.  Which brings up, 

Second, this is Crossports. We dissect nits, particularly when they seem incongruous. This news release from Fairfield and the study "report" had a bunch of statements about benefit and nothing describing how they got their numbers. And when the numbers seem preposterous, critical thinkers question them.  It's what we do.

And finally, to be clear, the study is hardly independent. It's an essentially an "Industry Association," if you will, of private colleges & universities in Connecticut that published conclusions of a "study" that says their members have a huge economic impact on the state.