Study Methodology

he Economic Impact Study, completed in 1999, assessed how public and private resources invested in the university yield economic benefits to the state in terms of increased employment, local expenditures, gross state product, and tax revenues.

The study's methodology resulted in conservative conclusions about CU's impact on the state. It used only the number of students living in Colorado solely because of CU, which resulted in actual numbers—such as student spending, employment, and payroll—being adjusted downward by an average of 54.5 percent. A modest multiplier (1.9) was also used to determine estimates in this analysis (see summary chart).

Overall, the study sought to quantify CU's economic impact on the state on three levels.

• Direct effects—payroll, operating expenses made locally, and local purchases made by students and people attending university-related functions
• Indirect effects—the economic activity generated among Colorado businesses to meet the university's demand for local goods and services
• Induced effects—the effects of expenditures made in the state by CU employees

All three effects were estimated and totaled to determine a "total economic impact."

	Summary of Economic Impact Study Multipliers University Employment Multiplier Northern Arizona, 1987 3.49 University of Wisconsin Madison, 1995 2.24 University of Wisconsin Madison Medical Center 2.24 University of Colorado, 1999 1.83-2.06 University of Colorado Health Sciences Center, 1990 2.05-2.50 Arizona State, 1984 1.51 University of Arizona, 1992 2.95* University of Arizona, 1987 2.60* Ohio State University, 1992 1.90* Tulane University, 1988 1.71* Rutgers, 1994 1.35* *The value of the multiplier was calculated by dividing the total estimated employment effect by the direct employment effect.

Economic Impact Study by Christiane W. Griffin, J. Alan Owen, University of Colorado, CU System Office of Information and Analysis, and consultants Ellen Pfalzgraff. Ph.D., Economics, and Susan Adams, Ph.D., Educational Consultants, March 2000. For more information, call 1-800-2CU-HELP (1-800-228-4357).

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