Good afternoon. I have a question about the impact of a public community college, particularly with respect to how the amount of a college’s budget that is initially spent within the study area should be estimated (as opposed to the portion of the budget that bypasses the study area completely). I have worked through Case Study 11 – it appears that the case study guides the user to use total budget figures (or in a case where the user has access to greater budget detail, estimating the impacts of operating budget, construction, payroll, etc. separately) and allow the model to estimate what percentage of that initial spending occurs within the local study area. I noticed that the only mention of the Local Purchase Percentage (LPP) in Case Study 11 is with respect to student spending (i.e., setting LPP to 100% for all events related to student spending, as all student expenditures are assumed to be within the study area). Since Case Study 11 does not direct the user to adjust the LPP for any of the other spending categories, I expect that these should be left at the SAM model value. I also understand that the Case Study may represent a somewhat simplified example, as payroll should likely reflect only employees who live within the study area and that among those employees, student employees should be excluded (so as not to double count payments they make to the college). I’ve recently run into a case where a college could provide operating and capital expenditures by vendor address, allowing me to estimate the institution’s spending within the local study area up front (i.e., before placing it in the model). If I had this information, could I then follow the same steps as described in Case Study 11 but set all of the LPP’s to 100% (e.g., in the case of the operating budget, entering the amount of money paid to vendors with local addresses into an institution spending pattern and setting all LPP’s to 100%)? Alternatively, is it preferable to simply run the college’s total budget figures (without taking prior steps to account for local versus out-of-area spending) through the appropriate institution spending activity (for operating budget) and industry change activities (for construction/capital budget and faculty/staff payroll), with an LPP set to the SAM model value? I’ve read several economic impact studies completed for or by colleges and universities where the analysts will state that they are estimating the effect of money spent within the area but then make no mention of how the initial, direct spending was estimated (leaving me to assume that the analyst is entering the total budget, regardless of the geography in which it was spent, and relying on LPP’s set to the SAM model value). Do you have a sense of whether this is the most common approach for colleges and universities to take, and if so, is this a generally accepted means of estimating an institution’s impact? Thank you for your time.
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