Vol. 19, No. 36

July 20, 2000

UD's economic impact on state exceeds $570 million

The University of Delaware economic impact on the state of Delaware exceeds $570 million, according to a 1999 study by the Office of Institutional Research and Planning. According to Heather Kelly, who coordinated the study, expenditures by students, faculty and staff and the University in Delaware totaled approximately $300 million during 1999. Using the standard multiplier effect of 1.9?where UD expenditures enable others to make purchases of goods and services — UD's total economic impact within the state is $570,648,234. In the study, Kelly concludes that the "University of Delaware's impact on the local community and state through economic benefits is immense. The students and the faculty and staff contribute a great deal to the local and state economy through their personal and household expenditures. Local businesses indicate the University and its community are a positive influence and help to make their businesses successful. Overall, the return on the state's investment in the University of Delaware is approximately three times greater than its initial investment." During October and November 1999, the economic impact study was sent to approximately 2,800 undergraduate and graduate students at the University, to approximately 1,829 faculty and staff on the Newark campus and to approximately 270 local businesses in the Newark area. Response rates were approximately 25 percent for students, approximately 52 percent for faculty and staff and approximately 34 percent for businesses. A follow-up mailing was sent to each group in February. Students When surveyed, students were asked to exclude University tuition, housing and meal plans from their monthly expenditures. The mean monthly student income from all sources after taxes was approximately $1,020, and the mean monthly expenditures spent in Delaware were approximately $780. On-campus students spent approximately $250 each month and off-campus students spent approximately $1,100. On-campus students' expenditures were spent more on telephone and cable, food and beverages, entertainment and recreation and services while off-campus students spent more on housing, utilities, automobile and medical and dental costs. The estimated total for annual expenditures spent in Delaware by the entire University student population was more than $143 million. Students also were asked to indicate six Newark businesses they frequent regularly. More than half were in the food and beverage industry, 30 percent were retail stores, 9 percent were grocery stores and 4 percent provided general entertainment, such as video stores. Faculty and staff Of the 934 faculty and staff responses to the study, 28 percent were faculty, 32 percent were professional staff, 26 percent were salaried staff and 14 percent were hourly staff. Of these, 75 percent were Delaware residents, and expenditures in Delaware varied according to the state of residence. The total mean of monthly faculty and staff household expenditures spent in Delaware was approximately $2,320. The major expenditures for those living in Delaware included housing, food and beverages and automobile. For nonresidents, the major expenditures in Delaware included food and beverage, education and automobile. The estimated annual expenditures spent in Delaware by the Newark campus faculty and staff totaled approximately $94.5 million. Local businesses Some 12 percent of the 90 respondents indicated 50 to 74 percent of their business income could be attributed to the University and its community. In addition, 21 percent indicated that 26 to 49 percent of their company business in the Newark area could be attributed to the University and its community. Approximately 28 percent of the respondents indicated that their business would decline if student enrollment declined with an additional 13 percent indicating they would experience a small impact or decline. According to respondents, the University and its community influenced decisions, such as scheduling events and sales, advertising, hiring and location. Asked how the University and its community affected their business as a whole, a number said it was an asset and had a positive influence on the community and business sales. One respondent said UD brought "vibrant" life to the community, and others indicated that UD plays an important part in their success. Of the respondents, 46 percent employed from one to four current UD students and 51 percent employed from one to four alumni. Overall economic impact The economic impact study also examined the effect of the University's income and disbursements. The University's largest source of operating revenue is tuition and fees. In addition, the University generates revenue through special events, such as those held in Clayton Hall, and during 1998-99 fiscal year, 246,221 persons also attended athletic events, trade shows and concerts at the Bob Carpenter Center. On the other side of the ledger, University purchased through Delaware vendors some $62.8 million worth (or 41 percent) of its total products and services. During the fall 1999, the University employed almost 3,400 faculty and staff on the Newark campus paying them approximately $154.8 million. The University also is responsible for generating additional jobs for businesses that provide goods and services to the University and its community. Using the Bureau of Economics Analysis' suggested formula that about 36 jobs are generated for each additional $1 million of output, approximately 10,810 new jobs are generated, thanks to UD. — Sue Moncure