The Economic Impact of Kalamazoo College on the Local Economy
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Authors
Kanter, Amanda
Issue Date
2009
Type
Thesis
Language
en_US
Keywords
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Abstract
This paper summarizes the range of impacts a college may have on a local economy as
well as the major methodology used in measuring these impacts. The two major ways a liberal
arts college can impact its local economy are through short-run expenditure impacts and long-run
human capital, or knowledge, impacts. The economic impact is generally measured in terms of
the number of jobs and income directly and indirectly created in the local economy as a result of
the college. Indirect impacts, also known as multiplier effects, show how the direct impacts
created by the college generate additional effects within the local economy. Data regarding
college operational expenditures, staff and faculty salaries & wages paid by the college, student
expenditure data, and student visitor expenditure data, among other factors, are utilized in
economic impact analyses to show the local effects of a college.
As a case study, an economic impact analysis was performed for Kalamazoo College on
the Kalamazoo-Portage Metropolitan Statistical Area (MSA) for the 2008/2009 academic year.
A student spending survey was administered and used to estimate the average expenditures of
Kalamazoo College students and their visitors in the local area. Data regarding college
expenditures and wages & salaries paid to college employees were collected directly from
Kalamazoo College. The results of this study are reported in the number of jobs, income, and
output created within the Kalamazoo-Portage MSA as a result of Kalamazoo College.
The overall value of output generated in the region for one academic year was $40.7
million. Gross Regional Product in the area increased by $3 I .1 million and the total personal
income impact of the college was $22.5 million. Kalamazoo College and its students created a
total employment impact of604 jobs, 350 of which were directly employed by the college. The
total Kalamazoo College employment multiplier was 1. 73. In other words, on average, every 10
employees at the college support 7 non-college workers in the MSA. Kalamazoo College
operational expenditures had an employment multiplier of 1.58 and an earnings multiplier of
1.65.
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89 p.
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