The Economic Impact of Colleges and Universities

John Siegfried, Allen Sanderson () and Peter McHenry ()
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Allen Sanderson: Department of Economics, University of Chicago

No 612, Vanderbilt University Department of Economics Working Papers from Vanderbilt University Department of Economics

Abstract: This essay describes methodological approaches and pitfalls common to studies of the economic impact of colleges and universities. Such studies often claim local benefits that imply annualized rates of return on local investment exceeding 100 percent. We address problems in these studies pertaining to the specification of the counterfactual, the definition of the local area, the identification of "new" expenditures, the tendency to double count economic impacts, the role of local taxes, and the omission of local spillover benefits from enhanced human capital created by higher education, and offer several suggestions for improvement. If these economic impact studies were conducted at the level of accuracy most institutions require of faculty research, their claims of local economic benefits would not be so preposterous, and, as a result, trust in and respect for higher education officials would be enhanced.

Keywords: Colleges; universities; local economic impact; economic impact study (search for similar items in EconPapers)
JEL-codes: I23 R11 (search for similar items in EconPapers)
Date: 2006-05
New Economics Papers: this item is included in nep-edu, nep-geo and nep-sog
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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http://www.accessecon.com/pubs/VUECON/vu06-w12.pdf First version, 2006 (application/pdf)

Related works:
Journal Article: The economic impact of colleges and universities (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:van:wpaper:0612

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