College: Modeling Private College & University Impacts using Industry Impact Analysis (Detailed)


If the university that you want to model is private, keep in mind that it will likely spend and save money in a much different way when compared to a public Institution. Remember that each school is unique, so to ensure that you get the most accurate results possible you’ll have to enter all the details you have into IMPLAN. To do this, it would be a great idea to utilize the newest event type in IMPLAN, the Industry Impact Analysis (Detailed) or IIA! With this Event, it is easier than ever to input values for Wage & Salary Employment, Employee Compensation, and spending on Intermediate Inputs (and also edit the Spending Pattern) or Output. You can also enter values for Proprietor Employment, Proprietor Income, Taxes on Production & Imports, and Other Property Income to reflect the data that you have. Note that you can just as easily leave these values blank if they are unknown, which would let IMPLAN estimate them. To demonstrate how to measure the total Economic Impact of your private college/university, let’s walk through an example! 


Markeson University, a four-year private school with a world renowned Applied Economics program, is located in Hampden County, Massachusetts. We can model the annual operations data we have on MU with an Industry Impact Analysis Event through Industry 481 - Junior colleges, colleges, universities and professional schools. This Industry includes all private colleges and universities while excluding public institutions. 

We know that in 2021 MU had total Output of $100M, 1,500 total employees (including full-time & part-time employees, as well as proprietors), $50M in annual fully-loaded payroll, and spent $35M on Intermediate Inputs. We also know that Markeson University is a tax-exempt organization, and thus paid no Taxes on Production & Imports. 

Starting from the Regions screen in IMPLAN, we can use the search box in the top left to find and select Hampden County, Massachusetts then navigate to the Impacts screen. After giving your Event a name, select Industry Impact Analysis (Detailed) as your Event Type while specifying the Industry as 481. Your screen should look like this (do not forget to switch the Group Dollar year to the year when this Impact occurred, 2021):


Working from left to right to populate the Event with our data, we can start with Employment. What we know is that Markeson University employed 1,500 total people in 2021, but we do not know how that is split out across Wage & Salary Employment and Proprietor Employment. So, we’ll allow IMPLAN to estimate that split by just dropping our 1,500 annual workers into the Total Employment box, leaving the W&S Employment and Proprietor Employment values blank. We will do the same thing with our payroll value, because we also do not have that split between Employee Compensation and Proprietor Income.


We can enter our $35M of Intermediate purchases in the Intermediate Inputs box. If we had any indication that the Spending Pattern of MU was unique we could take advantage of the “Edit Spending Pattern” functionality to reflect that. Say for example, that we know Markeson University is a dry campus, and thus spends 0% of their Intermediate Inputs on alcoholic products/beverages. If you open the Industry 481 Spending Pattern you will notice that Commodities 3106 - Beer/ ale/malt liquor and nonalcoholic beer, 3107 - Wine and brandies, and 3108 - Distilled liquors except brandies make up over 2% of their Spending Pattern! So we need to get rid of those. Just click the trashcan on the far right to delete them, and see the number of Commodities go from 242 to 239 and the sum of percentages drop by the same figure we just deleted.


We also know that Markeson University has no sports teams, including club/intramural sports, as well as no on campus fitness/recreational center. So we would need to delete Commodities 3382 - Sporting and athletic goods, 3497 - Commercial sports except racing, and 3505 - Fitness and recreational sports center services. 

Before we save our edited spending pattern, make sure to hit the menu icon in the top right and “Normalize”. This will redistribute that remaining 2.42% to the remaining Commodities in the Spending Pattern so that the sum of our percentages is once again 100%.


Make sure to hit save before closing the Spending Pattern window.


Now we can go ahead and manually override taxes on Markeson University by zeroing out Taxes on Production & Imports. Lastly, add our known Total Output value of $100M and our IIA Event should look like this:


After running our Markeson University Event through our Hampden County Group, navigate to the results screen and set the Dollar Year to 2021. The Economic Indicators by Impact table will look like this:


The cool thing here is that we have Direct Economic Indicators that match our Inputs! Direct Employment, Labor Income, and Output have all been specified by us within our IIA Event based on what we know about Markeson University and their dry campus. We know that Value Added = Output - Intermediate Inputs, with the data we have that would be Value Added = $100M - $35M. If you look at Direct Value Added you will see that $65M from our calculation! 


Considerations when Conducting College & University Economic Impacts

Modeling Public College & University Impacts


Written January 6, 2022