Variables Used in Economic Impact Calculations

A Note on Methodology

The Ryan/New Jersey model, which is a variation on the classic economic impact model developed by Caffrey and Isaacs [see references at right], was used to calculate the economic impact of Fairleigh Dickinson University. The difference between the two models lies in the substitution of estimated values from data available in the census to the information collected from surveys of faculty, staff and students. The latter was found to be problematic due to the low response rate of the surveys.

The variables that were substituted for survey data are:
(1) an estimate of non-housing expenditures in New Jersey counties,
(2) an estimate of the percentage of local residents who rent,
(3) an estimate of median rent,
(4) an estimate of employees’ and students’ expenditures within the local area,
(5) an estimate of local spending by full-time non-local employees,
(6) an estimate of average annual college-related expenses by full-time and part-time students, and
(7) the coefficient for jobs attributable to the institutions’ expenditures.

Variable

Estimate

Source

Estimate of non-housing expenditures for NY MSA Survey, Bureau of Labor Statistics, U.S. Dept of Labor (Table 21)

.74 for Madison/ Florham Park and Teaneck/ Hackensack

2007–08 Consumer Expenditure

Estimate of in-area expenditures  for employees

.75 for Madison/ Florham Park and Teaneck/ Hackensack

COEP Handbook for Economic Impact

Estimate of the percentage of local area residents who rent

Morris: 24%
Bergen: 33%

2006–2008 American Community Survey, U.S. Census Bureau

Estimates of the area’s median monthly rent

Morris: 1,097
Bergen: 1,119

2006–2008 American Community Survey, U.S. Census Bureau

Estimate of in-area spending on non-housing items by non-local, full-time employees

$1,000

Based on economic impact study at City University of New York and other regional universities

Estimate of annual college-related expenditures locally by full-time students

$2,900

Student cost of attendance budget by Financial Aid office

Estimate of annual college-related expenditures locally by part-time students

$1,000

Student cost of attendance budget by Financial Aid office

Coefficient for estimating jobs attributable to expenditures

.000010

Based on the economic impact study of New Jersey’s Indepen­dent Colleges and Universities on the State of New Jersey

The data was compiled and prepared by FDU’s Office of Institutional Research and Assessment

References

John Caffrey and Herbert H. Isaacs, 1971, Estimating the Impact of a College or University on the Local Economy, Washington, D.C.: American Council on Higher Education. College Outcomes Evaluation Program (COEP), 1990, Handbook for Calculating Short-Term Economic Impact at New Jersey’s Institutions of Higher Education, Trenton, New Jersey Department of Higher Education.