The Economic Value of Main Report

multiplier effects, the gross impacts are $127.8 million in labor income and $26.5 million in non-labor income. This sums to a total impact of $154.3 million in total added income associated with the spending of the college and its employees in the region. This is equivalent to supporting 1,841 jobs.

Table 3.2: Operations spending impact, FY 2022-23

Non-labor income (thousands)

Total income (thousands)

Labor income (thousands)

Sales (thousands)

Jobs supported

Initial effect

$94,217

$0

$94,217

$144,612

1,304

Multiplier effect Direct effect

$8,777

$4,883

$13,660

$24,849

108

Indirect effect

$2,231

$1,159

$3,389

$6,280

27

Induced effect

$22,615 $33,623

$20,457 $26,499

$43,072 $60,122

$71,500

401 537

Total multiplier effect

$102,629

Gross impact (initial + multiplier)

$127,840

$26,499

$154,339

$247,241

1,841

Less alternative uses of funds

-$12,989

-$12,598

-$25,587

-$47,782

-244

Net impact

$114,851

$13,900

$128,751

$199,459

1,597

Source: Lightcast impact model

The $154.3 million in gross impact is often reported by researchers as the total impact. We go a step further to arrive at a net impact by applying a counterfactual scenario, i.e., what would have happened if a given event – in this case, the expenditure of in-region funds on MCC – had not occurred. MCC received an estimated 40% of its funding from sources within the MCC Service Area. This portion of the college ’s funding came from the tuition and fees paid by resident students, from the auxiliary revenue and donations from private sources located within the region, from state and local taxes, and from the financial aid issued to students by state and local government. We must account for the opportunity cost of this in-region funding. Had other industries received these monies rather than MCC, income impacts would have still been created in the economy. In economic analysis, impacts that occur under counterfactual conditions are used to offset the impacts that actually occur in order to derive the true impact of the event under analysis. We estimate this counterfactual by simulating a scenario where in region monies spent on the college are instead spent on consumer goods and savings. This simulates the in-region monies being returned to the taxpayers and being spent by the household sector. Our approach is to establish the total amount spent by in-region students and taxpayers on MCC, map this to the detailed industries of the MR SAMmodel using national household expenditure coefficients, use the industry RPCs to estimate in-region spending, and run the in-region spending through the MR- SAM model’s multiplier matrix to derive multiplier effects. The results of this exercise are shown as negative values in the row labeled less alternative uses of funds in Table 3.2. The total net impact of the college ’s operations is $128.8 million in total added income, which is equivalent to supporting 1,597 jobs .

The economic value of Monroe Community College

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