Get help now

Regional Economic Impacts Of Idaho State

Updated September 1, 2022
dovnload

Download Paper

File format: .pdf, .doc, available for editing

Regional Economic Impacts Of Idaho State essay

Get help to write your own 100% unique essay

Get custom paper

78 writers are online and ready to chat

This essay has been submitted to us by a student. This is not an example of the work written by our writers.

Approximately 36% indicated that they owned their living quarters while 50% rented and the remainder reported living with family or friends. The average age of the students in this group was 30 years with 50% indicating that they were married. Over 57% indicated that they would live here if not enrolled at the University. They reported a local total annual spending of $85.5 million, which averages $13,716 per student household, the greatest per student spending of the three groups. Understandably, the largest spending category for this group is Housing which accounts for 27% of its total expenditures. This is followed by Food (22%) and Miscellaneous items at 17%.

Nearly two-thirds of this student group consists of permanent area households with one or more members currently attending ISU on either a part-time or full-time basis. An estimate of the proportion of this group’s total area expenditures that would be lost to the area in the absence of the University is calculated in the Impacts Assessment section of this report. Out-of-Area Students This student group consists of 5,138 ISU students who reside off campus and outside of Bannock County. The average age of this group was 35 years with 66% reporting that they were married at the time of the survey. Approximately 60% owned their homes, 25% rented and the remainder reported living with family or friends.

Members of this group reported a total annual area spending of $64.3 million or about $12,521 per student household. The proportion of those consumption purchases made in Bannock county, as opposed to the neighboring communities where they reside, is unknown, but is presumed to be not more than 25%. Their spending habits were approximately the same as the local non-dormitory students. Combining the spending of the two non-dormitory groups yields the graph in Figure3, which illustrates the representative category spending of ISU’s non-dormitory student households. While the University cannot claim to have directly caused the entire $156 million in consumer purchases made by its students and their entire households, it is important to recognize that a considerable number of area residents attend Idaho State University and have purchasing patterns and habits influenced by their student affiliation.

While the present section of this report recognizes the logic of discounting the expenditures made by student households who would likely remain in the area in the absence of the University, the total and more comprehensive impact figure is used here. Visitor Expenditures Highlights ISU attracts nearly quarter million visitors from outside the Pocatello area to its many events, facilities and programs. Out-of-area visitors spend an estimated $7 million annually on local purchases of lodging, food, automobile-related purchases and other retail items. Approach Visitors are drawn to the ISU campus to attend athletic and cultural events, attend conferences and workshops, and to visit facilities like Holt Arena, the Idaho Museum of Natural History, the Planetarium and the Bookstore.

Other visitors conduct business on campus, including prospective students and faculty who are being recruited or interviewed. Still others are out-of-area personal visitors to ISU faculty, staff and students. The number of visitors to the ISU campus has been estimated separately for the two visitor categories reported in Table 4. Recreational, Educational and Business Visitors include attendees and visitors to specific ISU facilities or sponsored events.

Personal Visitors include only out-of-area visitors to faculty, staff and students reported in surveys of those populations. In order to obtain an estimate of the number of Recreational, Educational and Business Visitors, each facility was polled for its attendance figures for the 1995-96 academic year. Officials representing each facility also provided an estimate of the percentage of their attendees who originated outside of the Pocatello-Chubbuck area. ISU’s major facilities and programs include Holt Arena, Reed Gymnasium, the Student Union, the Idaho Museum of Natural History and the Planetarium operated by the Physics Department. Performances held at Theatre ISU and Goranson Hall were also included, as were visitors to the ISU Bookstore.

The number of personal visitors was estimated separately for students and faculty/staff households. Twenty percent of the Personal Visitors were assumed to purchase lodging for an overnight stay, based on results of the student survey. Table 4: Visitors to the ISU Campus by Sponsoring Department (1995-96)SponsorAll VisitorsOut of Area VisitorsArea (Persons)(Persons)(Visitor Days)Expenditures Holt Arena Events433,350220,283220,283$6,619,489 Student Union Events222,81756,94869,415$2,217,115 ISU Bookstore60,0003,0001,500$39,000 Idaho Museum of Nat’l History patrons31,39020,40424,484$768,804 Continuing Education events13,2621,4685,170$483,395 Physics Department & Planetarium8,0005,8005,800$150,800 Theatre ISU patrons6,631734734$19,084 School of Applied Technology visitors3,387868964$27,921 Music Department events3,000600600$15,600 Miscellaneous ISU departments2,3221,3132,417$117,660 Visitors to ISU Students130,847130,847130,847$4,108,596 Visitors to ISU Faculty & Staff8,6538,6538,653$271,718 An estimate of the percent of out-of-area visitors who purchased overnight lodging was made for each facility or program within the Recreational, Educational and Business Visitors category. Lodging was estimated at $27 per night per visitor, assuming double occupancy and the average Pocatello room rate of $54 for 1996.

Day visitors were assumed to expend a conservative $26 per day, excluding event specific admissions. For overnight visitors the estimated $53 per day in area expenditures is consistent with other estimates for non-business travelers2. While it is tempting to sum the expenditures and number of visitors in each category of Table 4, such a summary total is not recommended because an overlap of visitors across the various categories would vastly overstate the number of actual persons visiting the ISU campus. For example, a typical out-of-area visitor might be included as the Personal Visitor of a student, and attend an ISU athletic event or concert while taking advantage of noncommercial lodging with friends or relatives. Only out-of-area visitors are assessed as having a direct economic impact on the Pocatello economy. While the number of local visitors is significant, and their recreational and other spending is very real, especially to local establishments and merchants, their spending is assumed to already be a part of the local economy.

In the absence of the ISU facility or event, they are assumed to make a comparable expenditure elsewhere in the Pocatello economy. Their expenditures cannot, therefore, be claimed exclusively by ISU as a part of its economic impact on the region. Expenditure Patterns The Holt Arena attracts more out-of-area visitors than any other ISU facility. More than 400,000 persons attended events held there during the 1995-96 academic year. An estimated 220,283 of those attendees are from outside of the Pocatello area, with about 90% of that number assumed to be purchasers of commercial lodging. Major events such as the Dodge National Circuit Finals Rodeo attract out-of-area visitors who remain in the area for several days, thus heightening their economic impact.

The Pond Student Union hosts numerous conferences, workshops, and other programs attended by outsiders as well as ISU faculty, staff, and students. Of the nearly quarter million attendees of its programs, about 56,000 are estimated to be out-of-area visitors. A small proportion report staying overnight, with a total estimated area impact of $2.2 million annually. The Idaho Museum of Natural History is visited by more than 20,000 out-of-area patrons annually, with direct local expenditures of $768,804. The Office of Continuing Education sponsors programs that attract an estimated 1,468 participants from outside of the area, with each staying an average of 3 days, and representing a direct local impact of $483,395.

Performances held at Theatre ISU and Goranson Hall attracted an estimated 1,334 out-of-area patrons, while the ISU Planetarium attracted about 5,800 nonlocal visitors. Student recruitment, including recruitment of students to the School of Applied Technology, is responsible for over 800 out-of-area visitors each year. Other significant categories of visitors with business on the campus include salespersons, accrediting teams and athletic team recruiting. Nearly 3,000 nonlocal visitors and $145,000 in direct impact can be attributed to those visitors. About 130,000 individuals are estimated to visit the area as the personal visitors of ISU faculty, staff and students. The typical student reports ten such visitors per year, a seemingly high figure, but consistent with visitor studies conducted by universities comparable to ISU2.

Out-of-area visitors to ISU faculty and staff number about 8,653. Combined, these personal visitors contribute more than $4.2 million into our local economy. As indicated above (see Approach), a high percentage of Personal Visitors are included as attendees and participants of various ISU events and programs, and should not be considered as additional to the visitors specific to those facilities or events. Impact Assessment Highlights Approximately 9% of all area economic activity are in some way related to ISU. The State of Idaho’s annual investment of $102 million stimulates at least $191 million in economic activity within southeastern Idaho, for an annual return of 87%.

Indirect and Induced Impacts Purchasing patterns for the University, as well as expenditure patterns for its students, faculty, staff and campus visitors were presented in detail in previous sections of this report. Approximately $215 million in direct expenditures are attributed to ISU’s presence using this approach. As those monies are expended in various sectors of the area economy they serve to stimulate additional business activity (induced effects) and additional household spending (indirect effects) on the part of those businesses and households benefiting from the direct expenditures. These effects combine to produce a multiplier effect of total spending.

Multipliers for local institutional purchases (1.391), visitor expenditures (1.366), household expenditures of locally resident faculty and staff (1.265), and for dormitory students (1.260) and nondorm students (1.364) were generated by the Regional Science Research Institute’s Input-Output model for Bannock County. This model makes use of industry interaction data across county lines to generate highly reliable estimates An estimated 8 full and part time jobs, represented by $1 million of business activity, and a wage proportion (.263), were then used to generate an estimate of the number of full and part time jobs and the amount of wages and salaries represented by the induced business activity. Table 5 identifies the direct, indirect, and total impacts of each of the four sources of economic impact under review. It identifies an additional $76.2 million in multiplier effects generated by the direct infusion of $215.7 million in business activity within the Pocatello economy. Altogether, those four sources of expenditures represent an economic stimulus of $291.9 million in private sector business activity within the region. Table 5: Summary of ISU-induced Local Spending Direct EffectsIndirect EffectsTotal Effects Students$156.4$56.2$212.6 Faculty/Staff$23.6$6.3$29.9 ISU Institutional Purchases$23.7$9.3$33.0 Visitors to ISU$12.0$4.4$16.4 Total:$215.7$76.2$291.9 Estimated contributions for each source of expenditure are also included in the table.

ISU’s 12,245 students represent the single largest proportion of impacts, with their household expenditures totaling more than $212 million in area business activity. The total stimulus of institutional purchases generates another $33 million, while the households of faculty and staff ($29 million) and campus visitors ($16 million) generate significant impacts. During 1996, Bannock County’s 73,379 residents earned $854 million in wage and salary income, while county establishments conducted $1.2 billion in retail business sales. Nonretail business added another $2 billion, yielding a gross county product value of about $3.2 billion. This perspective suggests that about 9% of the area’s economic activity is in some way connected to ISU, with nearly 75% of that amount due to the local spending of ISU students and their households.

Discounting Local Residents A significant portion of the University-related expenditures included in Table 5 would likely continue to occur in the absence of the University. Consequently, it is realistic to discount contributions made by area residents whose households would be reasonably assumed to maintain comparable contributions to the local economy if ISU were to cease to exist. The discounting procedure adopted for purposes of this study involves a relatively straightforward estimate of the proportion of ISU students, faculty and staff who would likely remain in the Pocatello area in the absence of the university. The proportion of institutional purchases and out-of-area visitor expenditures that would occur in the absence of the university is assumed to be near zero. Based on a survey of students conducted in conjunction with this report, an estimated 39% of the $212 million in student household expenditures would be lost in the absence of the University. A similar survey of faculty and staff reveals that 80% of faculty and 25% of staff would be lost to the area if the university were to cease to exist.

The prorated proportion of ISU’s estimated $29.9 million in wage-based local purchases at risk under these assumptions is $18.5 million. Table 6: Discounting Area Resident Impacts Gross Total EffectsExpenditures of Permanent ResidentsNet Total Effects Students$212.6$82.7$129.9 Faculty/Staff$29.9$18.5$11.4 Institutional Purchases$33.0$0.0$33.0 Visitors$16.4$0.0$16.4 Total$291.9$101.2$190.7 A summary of these calculations and assumptions is shown in Table 6. The net effect of this discounting procedure is to reduce the local impact of Idaho State University on the area’s economy by about $91 million. Consequently, $190.7 million in area expenditures remain as directly attributable to ISU’s presence. Cost Benefit Analysis Another way to look at the economic impact of Idaho State University involves cost-benefit analysis, i.e.

a comparison of value returned for investment made. ISU represents a capital investment on the part of the State of Idaho of $139 million in fixed assets including buildings, property and equipment. Annually the State of Idaho appropriates about $72 million to fund ISU operations. The University also receives about $41 million per year from federal sources (primarily student scholarships and loans), $23 million from student fees and sales of auxiliary services, and another $13 million from private and other sources. Altogether, the University operates on annual revenues of $149 million and an investment in property and equipment of $139 million. Return on those investments can be measured many different ways, but the one used here strives to place a value on the educational benefit received by ISU graduates.

According to a similar assessment conducted by Boise State University3, a 1993 male college student’s lifetime earnings are enhanced by $456,362 over earnings he would have received with only a high school diploma. Similar estimates are generated for female graduates, and for recipients of occupational certificates, academic Associate degrees and Master degrees. Based on the number of each type of graduate and their gender, the lifetime earnings of ISU’s 2,083 graduates for the year 1996 are increased by an aggregated $863 million! To realize an equivalent 40-year return, the initial investment would be valued at $466 million assuming an estimated 3% annual rate of return. Table 7: 40 Year Estimated Lifetime Earnings Differential for ISU Graduates Estimated Aggregated Lifetime Earnings Differential GraduatesAll 1995-96 GraduatesIdaho Resident Graduates Occupational (VoTech)521$72,961,728$42,242,026 Academic AA17$3,845,089$2,226,158 BA1,047$588,928,485$340,966,875 MA498$197,222,276$114,184,090 Totals2,083$862,957,578$499,619,150 Based on information compiled by ISU’s Office of Alumni Relations, about 58% of all known graduates of ISU programs reside within the State of Idaho.

Proportionately, Idaho residents realize a lifetime earnings enhancement of $499 million because of their educational attainment, with a present value of approximately $307 million. This present value is roughly equivalent to the human capital return on ISU’s activity. In addition to the estimated value of an education received by ISU’s graduates, the University has been shown (Table 6) to annually stimulate approximately $191 million worth of economic activity within the Pocatello area. Combined, the two forms of benefits total $498 million. This total annual benefit of $498 million costs the taxpayers of Idaho about $72 million per year, plus an investment of land, buildings and equipment worth $149 million. If the land and building assets are divided over a five-year period, the combined annual cost to the State of Idaho for operating Idaho State University is estimated at $102 million.

Summary In summary, the State of Idaho’s calculated annual investment of $102 million realizes an annual return valued at $498 million. This is very close to a five-to-one return on investment, if the value of the education received is given an estimated dollar value. A more conservative estimate of the State of Idaho’s return on its ISU investment can be calculated by excluding any reference to the value of the education received by its graduates. The direct and indirect impacts of institutional purchases, faculty, staff, and student household expenditures, plus the expenditures of out-of-area visitors and the prorated expenditures for land, buildings, and equipment totals a previously calculated $191 million. Those expenditures alone represent an 87% return on the initial $102 million investment.

The realization of the above rates of return on an ongoing basis, year after year, testifies to the significant profitability of Idaho State University in addition to its measured economic impact on Pocatello and the State of Idaho. 1INEEL Impacts, US Dept of Energy, Idaho Operations Office, 1997; Idaho Income Survey, Associated Taxpayers of Idaho, 1992; and Microvision Market Segmentation System, EquiFax/National Decision Systems, 1998. 2The Economic Impact of Northern Arizona University on Coconino County (1995), College of Business Administration, Northern Arizona University, 1995; The University of Virginia’s Impact on the Charlottesville Metropolitan Area, Center for Public Service, University of Virginia, 1990. 3The Impact of boise State University on the Economy of Idaho, Chuck Skoro, Department of Economics, Boise State University, 1996.

Social Issues.

Regional Economic Impacts Of Idaho State essay

Remember. This is just a sample

You can get your custom paper from our expert writers

Get custom paper

Regional Economic Impacts Of Idaho State. (2019, Dec 09). Retrieved from https://sunnypapers.com/regional-economic-impacts-of-idaho-state/