TABLE OF CONTENTS

• EXECUTIVE SUMMARY
• INTRODUCTION
• ECONOMIC ANALYSIS
• QUALITY OF LIFE

APPENDICES

1. EFFECT OF INCREASE IN STUDENT ENROLLMENT
2. METHODOLOGY
3. STUDENT SPENDING QUESTIONNAIRE
4. AUGUSTA STATE UNIVERSITY MISSION STATEMENT
5. BIOGRAPHIES OF AUTHORS

Executive Summary

A current assessment of Augusta State University (ASU) reveals that student enrollment at ASU already exceeds capacity and the university cannot add more students given the limitations of its existing facilities. It must add additional structures to include classroom buildings and housing if it is to accommodate increasing demand for higher education in the CSRA. Moreover, expansion of student enrollment is part of the plan by the University System of Georgia to increase capacity by 40 percent to serve an additional 100,000 students statewide by 2020.

Augusta State University contributes to the local economy through spending on its existing operations and new construction, as well as spending by faculty, staff and students. The current impact of ASU on the local economy is approximately $200 million (an explanation of these figures is provided in the section, Economic Analysis),  and continued growth will significantly enrich the local economy even more by creating more jobs and providing an educated work force.

This study concludes that:

• Growth to 10,000 students by 2020 means up to an extra 3,175 permanent jobs and an economic impact of $336 million in the localeconomy.
• Growth to 14,000 students by 2035 means up to an extra 6,957 permanent jobs and an economic impact of $722 million in the localeconomy.

 

The study also concludes that not only will there be a stronger, significantly more positive impact than currently exists on the economic foundation of the area but also on quality of life in the region. Expansion of ASU will continue to enhance Richmond County's image as a growing educational center with world-class educators, researchers and students. It will reinforce what industry leaders external to this area already recognize: that Richmond County and the larger metropolitan statistical area have invested in a knowledge economy that produces better graduates and an educated workforce. This can only help area recruitment efforts. In addition to attracting business and technological investment, construction of quality buildings and programs will bring conferences and other events ultimately increasing additional revenue to the area.

Attractive new construction will improve the aesthetic appeal of the area surrounding Wrightsboro Road. Furthermore, as Wrightsboro Road is a major gateway to several centers of business and culture, the entire community will benefit from an improvement of its streetscape.

Significantly, the Augusta Sustainable Development Agenda specifically endorses expansion of ASU in West Augusta along Wrightsboro Road. Construction and expansion of a West campus is seen as a means of correcting not only the diminished physical appearance and maintenance of the Wrightsboro Road corridor, but also providing more amenities to local residents.1

INTRODUCTION

Augusta State University (ASU) currently enrolls more than 7,000 students on its 80-acre main campus on Walton Way as well as at the Forest Hills campus which includes the Christenberry Field House on Wrightsboro Road. The current physical facilities totaling 975,808 square feet are at full capacity. As a consequence, the university has developed a master plan that calls for the expansion of the physical facilities to incrementally accommodate 8,000; 10,000; and ultimately 14,000 students. The purpose of this study is to provide an economic analysis of this expansion on the Augusta Metropolitan Statistical Area (MSA). The Augusta MSA includes Richmond, Columbia, McDuffie and Burke counties in Georgia and Aiken and Edgefield counties in South Carolina.

The ASU mission statement, which may be found in Appendix D on page 28, reinforces the role of the university not only in educating a diverse student population but also in providing programs to the local MSA and to the larger geographic region. The university impacts, therefore, not only the economy of the area but also quality of life. The economic impact is the outcome of spending on university operations, construction projects, spending by students, staff and faculty, and spending by the larger community on social and athletic programs that the university offers.

Quality of life refers to the satisfaction of a community with its physical, cultural and intellectual conditions . Because several of these conditions are subjective, itis often difficult to capture an exact measure of quality of life. Analysis can, however, provide a reasonable assessment based on standard of living, changes to physical structures and streetscapes, and community life. This study will provide a general assessment of quality of life.

ECONOMIC ANALYSIS

The purpose of the current study is to estimate the economic impact in terms of employment, labor income, value added and total output to the Augusta MSA economy of an increase in student enrollment of 1,000 to a maximum of 7,000 additional students. The study begins by assessing the current economic impact of ASU on the local economy. This is followed by analysis of growth in student numbers, first by 1,000, then 3,000 and finally 7,000 students. Expansion by 7,000 students to a total of 14,000 by 2035 is also part of the plan by the University System of Georgia to increase capacity statewide by 40 percent to serve an additional 100,000 students.

Any addition to the current student enrollment of about 7,000 students will require construction of new classroom buildings, housing, student centers and parking, as well as an increase in faculty and staff. The effect on the economy of the items mentioned in the preceding sentence can be calculated by using an input-output model. Input-output models trace the flow of dollars throughout a local economy and capture the direct and ripple effects (indirect and induced) of an economic activity. The input-output modeling software and data from IMPLAN (IMpact Analysis for PLANning, Minnesota IMPLAN Group) is used in this report. For more information, see Appendix B, Methodology.

Current Economic Impact

ASU, as a public university, contributes to local economic activity via different pathways, each of which is evaluated separately for a robust economic impact study that captures all the

measurable effects. To simplify the complexity of the problem, we use a process of partitioning by reducing the complex estimation issues into simpler and more manageable analysis units. Specifically, the greater activity that occurs as a result of increases in student enrollment will come from three broad sources: construction of new buildings, operating expenses for the new facilities including salaries of new staff and faculty, and increased student spending from higher enrollment.

It is important to distinguish between the impact resulting from the total operating budget and that from capital investment such as construction expenditures, as the latter only last as long as the activity takes place, whereas, annual operating expenditures continue on a recurring basis.

Table 1 on the following page presents a summary of the current economic impact of ASU on the local economy. Estimates for the current economic impact (2009-2010) capture: student spending, personnel spending, and non-personnel operational spending. Estimates do not capture payroll expenses for adjunct faculty, summer teaching by regular faculty, or student workers. In addition these estimates do not capture any grants received. Thus, estimates for both low and high spending scenarios need to be interpreted as conservative, lower-end estimates of the full impact.

Explanation

The study differentiates between low and high student spending, depending on whether students attend ASU in the fall and spring semesters only or year around. Student spending refers to personal consumption expenditures for eight different categories ranging from food and beverages to durable goods.

With respect to spending on salaries the study separately estimates the impact resulting from five groups of payroll accounts and their respective employment numbers:  faculty (255), exempt staff (182), non-exempt staff (151), physical plant employees (45) and housing employees (5). Operational spending is partitioned into two categories, physical plant operations and housing operations. Housing operations consists of total operational expenses (i.e., utilities) and security, repair and maintenance, and insurance.

Table 1: Current ASU Economic Impact Summary

	Initial Spending (current $)	Economic Impact (current $)	Value Added Impact (current $)	Labor Income Impact (current $)	Employment Impact (jobs)
Total Spending Low	195,270,766	194,336,530	133,782,548	78,907,378	2,659
Direct Effect		133,868,590	99,178,425	60,139,892	2,114
Indirect Effect		19,184,890	10,441,312	5,852,296	154
Induced Effect		41,283,051	24,162,811	12,915,191	391
Total Spending High	224,043,733	204,330,329	140,124,782	81,925,202	2,786
Direct Effect		140,926,211	103,841,047	62,250,196	2,215
Indirect Effect		20,526,543	11,180,035	6,261,437	165
Induced Effect		42,877,575	25,103,700	13,413,570	406

Note:
Initial Spending is university spending on wages/salaries and operating expenses as well as spending by students.
Economic Impact is the total production value; it is equivalent to sales revenues of businesses in the Augusta MSA.
Value Added is the extra value created in the Augusta MSA by ASU in converting inputs (e.g., utilities, personnel, computers etc.) into outputs (education).
Labor Income is all forms of labor income generated in the Augusta MSA.
Employment Impact is the total number of jobs created in the Augusta MSA.

Interpretation of results:
In the low spending scenario ASU has a current local economic impact of $ 194.3 million, and has created 2,659 jobs. In the high spending scenario ASU has a current local economic impact of $204.3 million and has created a total of 2,786 jobs.

FUTURE EXPANSION OF ASU STUDENT ENROLLMENT

Physical Requirements 

The Augusta State University Master Plan has calculated the physical requirements of an increase in enrollment of 1,000, 3,000, and 7,000 students. It is estimated that an extra 1,000 students will need an additional 108,500 square feet of classroom space. An extra 3,000 students will need 345,000 and an extra 7,000 students will need 828,000 square feet of classroom space. Depending on the type of construction-for example, the inclusion of labs or not--the costs are estimated to be $270 per square foot at the low end and $325 at the high end.

Additional students will necessitate additional parking spaces.

It is estimated that each additional student will require .44 of a parking space. Costs for parking will vary depending on the engineering, construction, and type of parking used.

The low estimate is $1,800 per parking space and the high estimate is $2,500. Additionally, the master plan calls for the construction of new residential housing. One thousand new beds will cost $40 million. Overall, the range of construction costs is presented in the table on the following page.

Table 2: Summary of Initial Construction Spending

	ConstructionCosts
StudentEnrollment	Low	High
8,000	$70,087,000	$76,362,500
10,000	$135,526,000	$155,425,000
14,000	$269,104,000	$316,800,000

Operating expenses include salaries for faculty and staff as well as the maintenance and operation of the physical plant and new housing. It currently costs ASU $6 per square foot to maintain the physical plant (including salaries of the physical plant workers). This includes utilities such as electricity, gas, and water. It is currently estimated that an additional 22 students will require the hiring of an additional faculty person. An additional 17.5 students will require the hiring of an additional staff person. Staff personnel are currently split between exempt employees (55%) and non exempt, hourly employees and these percentages are assumed to remain the same for the expansion. The projected number of new employees required to facilitate the increased enrollment are then multiplied by the current average salary for those workers. Average salary for faculty is $57,000, average salary of exempt staff is $52,630, and average salary of non-exempt staff is $28,683.

Finally, based on current costs it is estimated that the additional student housing to include 1,000 beds will cost approximately $1.34 million per year to operate.

Student Expenditures

In order to determine student expenditures, a random sample of 317 current students were surveyed. Students were asked to estimate their daily, weekly, monthly and annual expenditures ranging from food and beverages to electronics, appliances and furniture in the Augusta area. For a detailed list of the survey questions please see Appendix C. All other expenditures that did not fit in any of the seven categories of the survey were classified as miscellaneous retail spending. If students only spend money in the local economy during the traditional fall and spring semesters, the average annual spending per student amounts to just less than $18,000. If students are spending money year round, the spending increases to over $25,000 per student. The low and high student spending scenarios by category for each of the three potential student enrollment increases are provided in the table presented below.

Table 3: Summary of Initial Spending for 1000, 3000 and 7000 Additional Students
(All figures in dollars where M = million)

STUDENTS	FOOD & BEVERAGE	REAL ESTATE	TELECOM	UTILITIES	CLOTHING	MISC. RETAIL	APPLI- ANCES	FURNI- TURE	TOTAL
1000 LOW	3.361 M	0.0	677,542	0.0	674,825	11.442 M	805,381	346,463	17.5 M
1000 HIGH	5.154 M	0.0	1.170 M	0.0	899,766	15.440 M	805,381	346,463	23.8 M
3000 LOW	10.083 M	8.286 M	2.633 M	2.261 M	2.024 M	34.327 M	2.416 M	1.039 M	63.1 M
3000 HIGH	15.463 M	11.047 M	3.510 M	3.015 M	2.699 M	46.320 M	2.416 M	1.039 M	85.5 M
7000 LOW	23.527 M	24.857 M	6.143 M	6.783 M	4.724 M	80.097 M	5.638 M	2.425 M	154.2 M
7000 HIGH	36.081 M	33.142 M	8.190 M	9.045 M	6.298 M	108.08 M	5.638 M	2.425 M	208.9 M

In summary, an increase of 3,000 students would inject an additional $63 million to $86 million in student spending in the MSA. An increase of 7,000 students would inject an additional $154 million to $209 million in student spending in the MSA.

Estimates of Total Operational Spending

Unlike the presence of both low and high initial spending estimates for construction and student spending, the total operational budget does not vary. Following the analytical approach explained in Appendix B, we entered all initial spending categories into the IMPLAN modeling system. IMPLAN (IMpact Analysis for PLANning, Minnesota IMPLAN Group) is a widely used system that models input-output relations for regional economies. A total of six scenarios that manipulate increased current enrollment from an additional 1,000 students to an additional 7,000 as well as low and high estimates of construction costs and student expenditures are analyzed. Low spending scenarios assume the low construction costs and low student spending. High spending scenarios assume the high construction costs and high student spending.

1,000 Additional Students - Anticipated to Occur by 2015

As a result of increasing student enrollment by an additional 1,000 students, $94.86 million in the low initial spending scenario will produce the following economic impact of Augusta State University (via direct expenditures and related ripple effects) on the economy of the Augusta MSA: $131.7 million in economic activity or sales, 1,162 jobs, and $ 46.9 million in labor income. The economic impact of the high initial spending of $107.15 million amounts to a total of $142  million in economic activity (sales), 1,265 jobs, and $ 50 million in labor income.

3,000 Additional Students - Anticipated to Occur by 2020

As a result of increasing student enrollment by an additional 3000 students, $221.3 million in the low initial spending scenario will produce the following economic impact of Augusta State University via direct expenditures and related ripple effects on the local economy: $294.1 million in economic activity, 2,742 jobs, and $ 105.3 million in labor income. The economic impact of the high initial spending of $259.3 million amounts to a total of $335.6 million in economic activity, 3,175 jobs, and $ 119.6 million in labor income.

7,000 Additional Students - Anticipated to Occur by 2035

As a result of increasing student enrollment by an additional 7000 students, $464.5 million in the low initial spending scenario will produce the following economic impact of Augusta State University via direct expenditures and related ripple effects on the local economy: $623.1 million in economic activity, 5,933 jobs, and $ 223.6 million in labor income. The economic impact of the high initial spending of $566.9 million amounts to a total of $721.9 million in economic activity, 6,957 jobs, and $ 257.5 million in labor income.

Notes on Estimation

The three summary tables that follow provide detailed information on the direct, indirect and induced effects of initial spending for each additional student enrollment level for the low and the high spending scenarios. Each table includes detailed breakdowns for each of the three broad spending categories. Within each spending category there are three subcategories: direct, indirect and induced effects. Direct effects include the immediate impact of institutional spending and labor earnings that are associated with the construction and operation of the new buildings. Indirect effects refer to the value of goods and services that are required to operate ASU's physical plant and provide education to students. They include spending on payroll and materials of third party suppliers to the university, as well as the expenditures of employees and students. Induced effects refer to the economic impact of spending by employees of ASU and its students. The local establishments that are the recipients of these funds will hire employees who in turn will spend their income in the local economy. The figure under Economic Impact for total spending is the sum of these three items. In other words, Economic Impact refers to the value of total production; it is conceptually the equivalent of sales revenues of businesses. Value Added includes employee compensation, proprietary income, other property income, and indirect business taxes. It is the extra value creative by a business in converting inputs to outputs. Labor Income includes both the total payroll costs (including fringe benefits) of workers who are paid by employers and payments received by self-employed individuals. Employment Impact includes both full-time and part-time jobs.

Table 4: Economic Impact of Increasing Enrollment by 1000 Students

1000 AdditionalStudents	Initial Spending (current $)	Economic Impact(current $)	Value Added Impact(current $)	Labor Income Impact(current $)	EmploymentImpact  (jobs)
Total Spending Low	94,858,640	131,668,438	62,454,067	46,851,578	1,162
Direct Effect		85,179,395	36,774,793	31,188,559	773
Indirect Effect		21,952,451	11,317,666	7,987,595	157
Induced Effect		24,536,592	14,361,608	7,675,425	232
Total Spending High	107,150,099.00	142,060,426	66,475,900	49,539,890	1,265
Direct Effect		91,962,477	38,810,503	32,639,791	846
Indirect Effect		24,133,716	12,467,823	8,778,666	173
Induced Effect		25,964,233	15,197,574	8,121,433	246

Note:
Initial Spending is university spending on wages/salaries and operating expenses as well as spending by students.
Economic Impact is the total production value; it is equivalent to sales revenues of businesses in the Augusta MSA.
Value Added is the extra value created in the Augusta MSA by ASU in converting inputs (e.g., utilities, personnel, computers etc.) into outputs (education).
Labor Income is all forms of labor income generated in the Augusta MSA.
Employment Impact is the total number of jobs created in the Augusta MSA.

 

Table 5: Economic Impact of Increasing Enrollment by 3000 Students

3000 Additional Students	Initial Spending (current $)	Economic Impact (current $)	Value Added Impact (current $)	Labor Income Impact (current $)	Employment Impact  (jobs)
Total Spending Low	221,344,186	294,049,928	148,147,415	105,295,423	2,742
Direct Effect		192,448,783	91,757,358	71,365,644	1,884
Indirect Effect		46,442,590	24,104,734	16,675,755	336
Induced Effect		55,158,555	32,285,322	17,254,024	522
Total Spending High	259,291,063	335,589,698	168,110,254	119,587,845	3,175
Direct Effect		219,505,647	103,655,678	80,785,290	2,194
Indirect Effect		53,416,306	27,773,595	19,200,249	387
Induced Effect		62,667,745	36,680,981	19,602,307	594

 

Table 6: Economic Impact of Increasing Enrollment by 7000 Students

7000 Additional Students	Initial Spending (current $)	Economic Impact (current $)	Value Added Impact (current $)	Labor Income Impact (current $)	Employment Impact (jobs)
Total Spending Low	464,480,989	623,059,775	321,332,543	223,554,244	5,933
Direct Effect		409,744,222	202,703,284	152,580,871	4,125
Indirect Effect		96,193,803	50,075,489	34,337,187	699
Induced Effect		117,121,751	68,553,770	36,636,187	1,109
Total Spending High	566,882,991	721,934,603	368,721,142	257,518,764	6,957
Direct Effect		474,141,905	230,900,016	174,941,131	4,857
Indirect Effect		112,826,418	58,821,699	40,361,075	822
Induced Effect		134,966,280	78,999,428	42,216,558	1,278

Note:
Initial Spending is university spending on wages/salaries and operating expenses as well as spending by students.
Economic Impact is the total production value; it is equivalent to sales revenues of businesses in the Augusta MSA.
Value Added is the extra value created in the Augusta MSA by ASU in converting inputs (e.g., utilities, personnel, computers etc.) into outputs (education).
Labor Income is all forms of labor income generated in the Augusta MSA.
Employment Impact is the total number of jobs created in the Augusta MSA.

 

Calculating the Multiplier Effect

Induced effects are the ripple effects of these spending patterns throughout the local economy. For example, student spending on cell phones (direct effect) may mean a higher commission for a sales person at a Verizon store who will then spend the money at TGI Friday's. The wait staff at Friday's sees the resultant increase in tips and so on and so forth. The size of ripple effects (the sum of indirect and induced effects) relative to direct effects determines the size of the multiplier. Each of the four spending categories (construction, personnel, operations and student spending) has a different multiplier. Multiplier results for each estimated model by category are summarized below.

Table 7: Estimated Multipliers

Students	Construction	Operations	Personnel	Student Spending Low	Student Spending High	Total Low	Total High
1000	1.54	1.46	1.73	0.68	0.66	1.39	1.33
3000	1.54	1.46	1.73	0.81	0.76	1.33	1.29
7000	1.54	1.46	1.73	0.9	0.79	1.34	1.27

Summary of Economic Impact

Augusta State University has no room for further expansion on its current campus. The Master Plan allows for student enrollment up to 14,000 students. If the university were able to acquire the land and build new facilities to accommodate the increased student body, the impact on the local economy could be as large as the addition of nearly 7,000 new jobs and almost three quarters of a billion dollars in economic activity.

QUALITY OF LIFE

Developoment of a West ASU campus in the vicinity of the Forest Hills campus has multiple positive implications for quality of life in that area. Quality of life refers to the objective and subjective measures of well-being and satisfaction felt by community members. Aspects that are considered include 1) physical well-being, 2) social integration, and 3) opportunities for growth and leisure.

Physical Well-being

There are two categories of factors that contribute to physical well-being. The most objective is the aesthetic consequences of razing older structures and replacing them with new construction. Currently located along Wrightsboro and Damascus Roads are neglected strip shopping centers, aging apartment complexes, and unkempt structures and vacant lots. Using the Walton Way campus as a model, one can conclude that the new buildings and grounds will be as attractive and enhance adjoining property and property values in the Wrightsboro corridor. On the main Walton Way campus aging structures and minimal landscaping were replaced with buildings that blend with the surrounding community and lush green-spaces that add to Augusta's image as The Garden City.

Also included is being able to physically get around and feeling free of worry or stress. With the addition of new structures along the Wrightsboro Road corridor, the altered physical environment will support interaction not only among students but also among other residents of the area. The ASU master plan supports walkways and green-spaces that will facilitate travel within secure areas. Residents can expect a real and perceived sense of safety. 

Social Integration

The presence of new housing, academic and recreational facilities will stimulate a sense of belonging among residents and provide for the development of friendships. The outcome is a well-integrated community that discourages crime.

Growth and Leisure

An outcome of additional buildings, added faculty and more students is an even more stimulating environment that encourages growth and development not just among students but also among area residents. Moreover, the addition of athletic fields and performance facilities will add to leisure pursuits.

Summary

Quality of life will improve dramatically with the addition of students and facilities to accommodate them. Expansion of ASU enhances Richmond County's image as a growing educational center with world-class educators, researchers and students. Additional expansion will further reinforce what industry leaders external to this area already recognize: that Richmond County and the rest of the MSA has invested--and will continue to--in a knowledge economy that produces better graduates and future employees. This can only help the recruitment process. Moreover, investment in quality structures and programs will bring conferences and other events ultimately increasing revenue to the area.

Note: The Augusta Sustainable Development Agenda (ASDA) specifically endorses expansion of ASU in West Augusta along Wrightsboro Road, as it is a major gateway to several centers of business and culture. The authors of the ASDA note that the entire community will benefit from improving and maintaining the Wrightsboro Road corridor for three reasons: 1) new, attractive buildings and green space will send an inviting message to visitors, 2) serve as an impetus to build or rehab affordable housing in adjacent areas and 3) provide more amenities to local residents.1

APPENDIX A

EFFECT OF INCREASE IN STUDENT ENROLLMENT

ASU, as a public university, contributes to local economic activity via different pathways, each of which can be evaluated separately for a robust economic impact study that captures all the measurable effects. To defuse the complexity of the problem, we use a process of partitioning by reducing the complex estimation issues into simpler and more manageable analysis units. We extend the partitioning within the total construction spending to distinguish between the new physical plant, new housing and new parking. Similarly, we extend the partitioning within total operations spending to distinguish between new physical plant operations, new housing operations, and new faculty and staff. Furthermore, we separately estimate the impact resulting from three payroll accounts: new faculty, new exempt staff and new non-exempt staff. Finally, our last analysis unit examines impacts stemming from actions associated with student spending, i.e., personal consumption expenditures for eight different categories ranging from food and beverages to durable goods. For a detailed explanation of our methodology see Appendix B.

Tables 8 - 10 follow on pages 18 - 20 and provide a detailed breakdown of expenditures based on increased enrollments of 1,000, 3,000 and 7,000 students.

Table 8: Economic Impact of Increasing Enrollment by 1000 Students

1000 Additional Students	Initial Spending (current $)	Economic Impact (current $)	Value Added Impact (current $)	Labor Income Impact (current $)	Employment Impact  (jobs)
Construction Expenses Low	70,087,000	107,966,976	44,801,772	34,102,892	781
Direct Effect		70,087,000	24,044,229	21,113,546	471
Indirect Effect		19,979,628	10,279,509	7,391,026	141
Induced Effect		17,900,347	10,478,034	5,598,321	170
Physical Plant	29,295,000	45,128,092	18,726,268	14,254,345	326.4
New Housing	40,000,000	61,618,832	25,569,234	19,463,178	446
New Parking	792,000	1,220,053	506,271	385,371	9
Construction Expenses High	76,362,500	117,634,201	48,813,266	37,156,422	851
Direct Effect		76,362,500	26,197,118	23,004,027	513
Indirect Effect		21,768,578	11,199,923	8,052,808	154
Induced Effect		19,503,122	11,416,224	6,099,587	185
Physical Plant	35,262,500	54,320,851	22,540,878	17,158,007	393
New Housing	40,000,000	61,618,832	25,569,234	19,463,178	446
New Parking	1,100,000	1,694,518	703,154	535,237	12
Operating Expenses	6,971,558	11,520,007	10,057,999	8,031,825	174
Direct Effect		7,219,132	7,555,081	6,685,740	134
Indirect Effect		145,091	71,372	44,608	1
Induced Effect		4,155,784	2,431,546	1,301,477	39
Physical Plant	651,000	950,442	786,804	622,485	12
New Housing	1,338,000	1,953,443	1,617,119	1,279,393	26
All Personnel	4,982,558	8,616,122	7,654,075	6,129,947	137
ASU Faculty Payroll	2590909	4,480,347	3,980,087	3,187,546	63
ASU Exempt StaffPayroll	1654085	2,860,339	2,540,963	2,034,990	42
ASU Non-Exempt StaffPayroll	737562	1,275,436	1,133,025	907,410	31
Student Spending Low	17,800,082	12,181,456	7,594,296	4,716,861	207
Direct Effect		7,873,264	5,175,483	3,389,273	169
Indirect Effect		1,827,732	966,785	551,961	15
Induced Effect		2,480,461	1,452,028	775,627	24
Student Spending High	2,3816,041	15,810,104	10,008,559	6,253,521	277
Direct Effect		10,259,218	6,866,057	4,530,979	228
Indirect Effect		2,261,442	1,216,891	693,977	18
Induced Effect		3,289,444	1,925,612	1,028,566	31
Total Spending Low	94,858,640	131,668,439	62,454,067	46,851,578	1,162
Total Spending High	107,150,099	142,060,426	66,475,900	49,539,890	1,265

Table 9: Economic Impact of Increasing Enrollment by 3000 Students

3000 Additional Students	Initial Spending (current $)	Economic Impact (current $)	Value Added Impact (current $)	Labor Income Impact (current $)	Employment Impact  (jobs)
Total Construction Expenses Low	135,526,000	208,773,844	86,632,402	65,944,166	1,510
Direct Effect		135,526,000	46,493,905	40,826,896	910
Indirect Effect		38,634,256	19,877,306	14,291,896	273
Induced Effect		34,613,589	20,261,192	10,825,375	328
Physical Plant	93,150,000	143,494,855	59,544,356	45,324,876	1,038
New Housing	40,000,000	61,618,832	25,569,234	19,463,178	446
New Parking	2,376,000	3,660,159	1,518,813	1,156,113	27
Total Construction Expenses High	155,425,000	239,427,672	99,352,454	75,626,608	1,732
Direct Effect		155,425,000	53,320,505	46,821,421	1,043
Indirect Effect		44,306,843	22,795,849	16,390,345	313
Induced Effect		39,695,829	23,236,100	12,414,842	376
Physical Plant	112,125,000	172,725,288	71,673,761	54,557,721	1,249
New Housing	40,000,000	61,618,832	25,569,234	19,463,178	446
New Parking	3,300,000	5,083,554	2,109,462	1,605,712	37
Total Operating Expenses	18,355,673	30,823,952	27,081,166	21,648,564	474
Physical Plant	2,070,000	3,022,143	2,501,821	1,979,330	40
New Housing	1,338,000	1,953,443	1,617,119	1,279,393	26
All Personnel	14,947,673	25,848,366	22,962,226	18,389,840	410
ASU Faculty Payroll	7,772,727	13,441,042	11,940,262	9,562,640	190
ASU Exempt Staff Payroll	4,962,257	8,581,017	7,622,890	6,104,971	126
ASU Non-Exempt Staff Payroll	2,212,689	3,826,307	3,399,074	2,722,229	93
Student Spending Low	67,462,513	54,452,132	34,433,847	17,702,693	757
Direct Effect		37,682,058	24,924,023	12,515,547	609
Indirect Effect		7,426,319	4,039,510	2,266,409	60
Induced Effect		9,343,755	5,470,314	2,920,737	89
Student Spending High	85,510,390	65,338,073	41,676,634	22,312,674	969
Direct Effect		44,839,922	29,995,743	15,940,667	786
Indirect Effect		8,727,447	4,789,828	2,692,454	72
Induced Effect		11,770,704	6,891,064	3,679,553	112
Total Spending Low	221,344,186	294,049,928	148,147,415	105,295,423	2,742
Total Spending High	259,291,063	335,589,698	168,110,254	119,587,845	3,175

 

Table 10: Economic Impact of Increasing Enrollment by 7000 Students

7000 AdditionalStudents	Initial Spending (current $)	Economic Impact (current $)	Value Added Impact (current $)	Labor Income Impact (current $)	Employment Impact  (jobs)
Construction Expenses Low	269,104,000	414,546,850	172,019,578	130,940,473	2,999
Direct Effect		269,104,000	92,319,520	81,066,958	1,806
Indirect Effect		76,713,197	39,468,902	28,378,366	541
Induced Effect		68,729,654	40,231,156	21,495,149	651
Physical Plant	223,560,000	344,387,647	142,906,446	108,779,697	2,491
New Housing	40,000,000	61,618,832	25,569,234	19,463,178	446
New Parking	5,544,000	8,540,370	3,543,896	2,697,596	62
Construction Expenses High	316,800,000	488,021,149	202,508,339	154,148,371	3,530
Direct Effect		316,800,000	108,682,238	95,435,272	2,127
Indirect Effect		90,309,846	46,464,372	33,408,148	637
Induced Effect		80,911,303	47,361,729	25,304,951	766
Physical Plant	269,100,000	414,540,691	172,017,025	130,938,529	2,999
New Housing	40,000,000	61,618,832	25,569,234	19,463,178	446
New Parking	7,700,000	11,861,625	4,922,078	3,746,662	86
Total Operating Expenses	41,183,904	69,419,442	61,200,018	48,939,414	1,076
Physical Plant	4,968,000	7,253,144	6,004,370	4,750,393	95
New Housing	1,338,000	1,953,443	1,617,119	1,279,393	26
All Personnel	34,877,904	60,312,854	53,578,529	42,909,628	956
ASU Faculty Payroll	18,136,364	31,362,431	27,860,611	22,312,827	444
ASU Exempt Staff Payroll	11,578,600	20,022,373	17,786,744	14,244,933	295
ASU Non-Exempt Staff Payroll	5,162,940	8,928,049	7,931,174	6,351.868	217
Student Spending Low	154,193,075	138,993,483	88,112,947	43,674,357	1,858
Direct Effect		97,299,646	64,421,102	30,768,096	1,489
Indirect Effect		18,623,492	10,184,961	5,695,304	151
Induced Effect		23,070,345	13,506,884	7,210,958	219
Student Spending High	208,899,087	164,394,012	105,012,785	54,430,979	2,351
Direct Effect		114,001,329	76,255,115	38,760,043	1,901
Indirect Effect		21,659,459	11,935,701	6,689,410	178
Induced Effect		28,733,225	16,821,969	8,981,527	272
Total Spending Low	464,480,979	623,059,775	321,332,543	223,554,244	5,933
Total Spending High	566,882,991	721,834,603	368,721,142	257,518,764	6,957

Note:Initial Spending is university spending on wages/salaries and operating expenses as well as spending by students.

Economic Impact is the total production value; it is equivalent to sales revenues of businesses in the Augusta MSA.

Value Added is the extra value created in the Augusta MSA by ASU in converting inputs (e.g., utilities, personnel, computers etc.) into outputs (education).

Labor Income is all forms of labor income generated in the Augusta MSA.

Employment Impact is the total number of jobs created in the Augusta MSA

APPENDIX B

METHODOLOGY

To measure the potential effects of new construction, operations and student spending in the local economy, we employ an economic impact analysis methodology. Other studies have employed a contribution methodology. The main difference between the contribution versus the impact methodology stands in that economic contribution represents measures of the overall level of contributions, economic impact represents marginal (additional) changes that occur due to a change in the economy. In the case of our impact methodology a comparison is being made between two situations of different student enrollments and the marginal difference is being quantified. Our study quantifies the net changes in these economic contributions - the economic impacts of student enrollment increases.

One of the most critical aspects of understanding contribution/impact analysis is the distinction between the “local” and “non-local” economy. The local economy is defined as part of the model building process and is known as the study area. Typically, the study area is a county or a group of counties that share economic linkages. The non-local economy is the rest of the world that is not modeled directly. Our study area consists of the Augusta MSA (Richmond, Columbia, McDuffie and Burke counties in Georgia and Aiken and Edgefield counties in South Carolina).

To measure student spending the authors conducted a survey of 22 classes randomly selected from the fall schedule of classes. The survey resulted in 317 usable questionnaires that asked students to provide figures for daily, weekly, monthly and annual expenditures. The questions captured school-other than tuition-expenses as well as living, recreational and miscellaneous spending. A copy of the questionnaire may be found in Appendix C.

Data for average annual salaries for faculty and staff, and for construction and operation of new buildings and grounds, were obtained from Human Resources and the Vice President for Business Operations. To measure the inter-relationship of these figures with the local economy, the study uses the IMPLAN modeling system. IMPLAN models input-output relations for regional economies using an estimation technique that captures the multiplier effect of one-time and permanent investments on the local economy. IMPLAN is a highly regarded modeling tool that was developed originally by the USDA Forest Service. It measures the input of the monetary expenditures that were identified by the authors and the subsequent output effect on the six county MSA. In other words the model measures the direct and indirect contribution of an increase in student enrollment on the local economy. The table below explains a list of important terms and definitions for the purposes of properly reading the results of an IMPLAN analysis.

 

	Unit	Equivalent to	Merits/Advantages	Disadvantages
Output	$US current year	Total sales	Used as an overall impact figure	Potential for double-counting
Employment	Annual average jobs	Number of salaried employees, and self-employed, including full-time, part-time andseasonal workers	Stablemetric (not dependent on dollar amounts)	Not in FTE (full-time equivalents)
LaborIncome		Valu eadded to the product by the labor component	Doe snot include double counting	Labor income is a component of output and should not be added to output.

Impact	Equivalent to	Examples
Direct Impact	Initialactivity in the economy	Spendingby ASU employees and students.
Indirect Impact	Summation of changes in the local economy due to spending for goods and services by the industries directly impacted.	ASU enrollment increases cause increases in operational, construction, facultyand staff, and student expenses on a large number of goods and servicesranging from electricity to soda and snacks, which in turn increases theproduction of the suppliers of these goods and services. Indirect impactscapture those ripples moving through the economy related to the purchase ofgoods and services.
Induced Impact	The induced impact is the summation of changes in the local economy that occurdue to spending by labor by the employees in the industry or industriesdirectly impacted.	Increasing ASU enrollment leads to new faculty and staff employment, which increases theincome spent in the study area to purchase housing, buy groceries, and go outto dinner. As they spend their new income, more activity occurs in the localeconomy. Induced impacts capture those ripples moving through the economyrelated to new employment.

As do all regional models, IMPLAN must make assumptions about economic activity and, therefore, has some limitations. For example, the production function underlying the IMPLAN model assumes constant returns to scale and no substitution among inputs in producing each industry's output. Research has shown that this assumption is reasonable for most but not every case. Also, the multipliers are best suited for analyzing the impact of changes in expenditures that are small relative to the size of the regional economy. This study defines the relevant region for ASU as the relevant Augusta MSA rather than a specific county. Estimating the economic impact on an MSA or a combination of counties rather than a single county should enhance the reliability of the impact estimates. Calculating the impact on a combination of counties rather than a single county tends to internalize feedback effects, which increases the reliability of the impact estimates.

IMPLAN multipliers are a snapshot of the region at a specific time and implicitly assume that the infrastructure of the community does not change. Thus, the multipliers capture interactions and accounting relationships that may not hold in the future. Our study uses 2008 data, thus all predictions were based on the assumption that the local economy in the near future will not be significantly different from that in 2008 (i.e., the infrastructure of the community does not change).

APPENDIX C

COPY OF STUDENT SPENDING QUESTIONNIARE

The Hull College of Business is creating a profile of students enrolled at Augusta State. We are interested in what it really costs students to live and go to college. Please do not write your name on any part of the survey so that your answers can remain anonymous. You are not required to answer any of these questions and your participation is completely voluntary. If you do not wish to participate please leave the survey blank.

Thank you for taking the time to complete this survey!

1. Are you a:
____Freshman       ____Senior
____Sophomore      ____Post-baccalaureate or Graduate Student
____Junior      ____NA, (Does not apply to me)

2. Where do you currently live?
____ in university housing
____ off campus

3. What is the zip code of your permanent residence? ___________________

Now we would like to ask you about your living expenses. Question 4 asks about your daily expenses, question 5 about your weekly expenses, question 6 about your monthly expenses, and question 7 about your annual expenses. Please give us your best estimates.

4. Please estimate your daily expenditures for items such as beverages, snacks, restaurant/fast food meals, and any other items.

______________ dollars

5. Please estimate your weekly expenditures in the Augusta area on items such as groceries, gas, entertainment/recreation.

________________ dollars

6. Please estimate your monthly expenditures in the Augusta area for the following items. (If you live at home and your parent(s) pay any of the following, write NA in the space provided.

a. Rent       ________
b. Mobile and electronic devices such as
cell phone, internet, cable/satellite      $ ________
c. Utilities (electricity, water, etc.)      $ ________
d. Clothing, shoes, and accessories       $ ________
e. Supplies for home or school            $________
f. Other (please list) _________________________ $ ________

7. Please estimate your annual purchases in the Augusta area for the following items:

a. Electronics such as computers, televisions, etc.      $ ________
b. Furniture  such as chairs, desks, bedroom       $_________
c. Small home appliances such as kitchen items      $ ________
c. Other (please list)___________________      $ ________

8. What is your gender?

____Female

_____Male

Thank you for helping us with this survey!

 

Profile of Student Spending - Summary of Survey Data

Average Per Student Spending	Daily	Weekly	Monthly	Annual
Food & beverages	$14.13
Groceries, gas &entertainment		$110.60
Rent			$460.30
Telecommunication			$97.50
Utilities			$125.60
Clothing			$75
Supplies			$50
Monthly other			$597
Electronics				$659
Appliances				$146
Furniture				$346.50
Annual other				$1734.70

APPENDIX D

Augusta State University Mission Statement

As a unit of the University System of Georgia, Augusta State University is committed to excellence in teaching, advancement of knowledge, and enrichment of the community in a climate that fosters humane values and a life-long love of learning.

This mission is based on the value of a liberal arts education for students who are diverse in ethnicity, background, age, and preparation.

The mission obligates the university to be open to the voices of all its members, to be responsive to the needs of its community, and to measure its success by the success of its students.

To accomplish its mission, the university offers a broad array of undergraduate programs in arts and sciences and professional fields of study and graduate programs below the doctoral level. It fosters the intellectual growth of its students through learning assistance in a university college, honors courses, and student research and cultivates faculty members who are excellent in teaching, active in scholarship, and generous in service.1

BIOGRAPHIES OF AUTHORS

Fjorentina Angjellari-Dajci is an Assistant Professor of Economics at Paine College with an MA and Ph.D. in Economics from Kansas State University. Her research has focused on the interrelations between economic performance, institutions, social capital, civil society and social networks, both at national and regional levels. Her most recent research fields include economic evaluations of healthcare and telehealth systems, forecasting of regional business cycles, economic impacts of higher education, dynamic social network analysis, and radioactive waste management. She has published numerous journal articles and a book chapter, and has secured several research grants. Dr. Angjellari-Dajci is a member of the International Society for Telemedicine & eHealth, has presented at the 8th Tel-e-Med Conference in Luxembourg and the 9th Annual Meeting of the International Society for Autism Research (IMFAR 2010).

Barbara Coleman earned her Ph.D. in marketing at the University of Georgia. She is Associate Dean and Professor of Marketing in the Hull College of Business at Augusta State University. In addition to working on other regional economic impact studies, her principal research interests include healthcare, the marketing of nonprofits, and travel and tourism. She has published numerous articles in a variety of academic journals as well as several book chapters. She has been teaching a senior level research methods class for 20 years. In that capacity she has directed countless pro-bono research projects for local businesses and nonprofits.

Simon Medcalfe earned a Ph.D. in Business and Economics from Lehigh University in Pennsylvania. He also holds a M.Sc. in Finance and B.A. in Economics from the University of Leicester in England. He is currently Assistant Professor of Finance in the James M. Hull College of Business at Augusta State University where he teaches economics and finance. He has published books and journal articles on sports economics, healthcare economics, and economic and financial literacy. He developed the Augusta Leading Economic Index and is the author of the Augusta Economic Commentary. He has also provided economic impact analyses for several organizations in the Central Savannah River Area.