{"id":912,"date":"2018-08-15T16:19:33","date_gmt":"2018-08-15T21:19:33","guid":{"rendered":"https:\/\/www.wisconsin.edu\/economic-development\/?page_id=912"},"modified":"2018-08-16T14:37:09","modified_gmt":"2018-08-16T19:37:09","slug":"methodology-for-this-study","status":"publish","type":"page","link":"https:\/\/www.wisconsin.edu\/economic-development\/economic-impact-study\/methodology-for-this-study\/","title":{"rendered":"Methodology for this Study"},"content":{"rendered":"\n\t\t\t\t\t<div id=\"cfct-build-912\" class=\"cfct-build grid\">\n\t\t\t\t\t\t<div class=\"row\"><div class=\"col-md-3 cfct-block\">\n\t\t\t<div class=\"cfct-module cfct-module-loop-subpages\">\n\t\t\t\t<div class=\"\"><h3 class=\"cfct-mod-title\" id=\"title-cfct-module-ac716d935dd3c5198475d3c3228aa0f8\"\">Economic Impact Study 2018<button type=\"button\" class=\"visible-xs collapsed\" data-toggle=\"collapse\"\n                                                data-target=\".menu-cfct-module-ac716d935dd3c5198475d3c3228aa0f8-container\">\n\t\t<span class=\"sr-only\">Toggle navigation<\/span>\n\t\t<span class=\"glyphicon glyphicon-chevron-up\"><\/span><\/button><\/h3><div class=\"cfct-mod-content menu-cfct-module-ac716d935dd3c5198475d3c3228aa0f8-container collapse navbar-collapse\">\n    <nav aria-labelledby=\"title-cfct-module-ac716d935dd3c5198475d3c3228aa0f8\">\n        \n\t\t\t\t\t<ul class=\"cfct-module-loop-subpages menu nav\">\t\t\t<li ><a href=\"https:\/\/www.wisconsin.edu\/economic-development\/economic-impact-study\/executive-summary\/\">Executive Summary<\/a><\/li>\n\t\t\t\t\t\t<li ><a href=\"https:\/\/www.wisconsin.edu\/economic-development\/economic-impact-study\/economic-impact-study-introduction\/\">Introduction<\/a><\/li>\n\t\t\t\t\t\t<li ><a href=\"https:\/\/www.wisconsin.edu\/economic-development\/economic-impact-study\/overall-economic-impact-of-uw-system-on-the-wisconsin-economy\/\">Overall Economic Impact of UW System on the Wisconsin Economy<\/a><\/li>\n\t\t\t\t\t\t<li ><a href=\"https:\/\/www.wisconsin.edu\/economic-development\/economic-impact-study\/uw-system-impact-on-jobs-in-wisconsin\/\">UW System Impact on Jobs in Wisconsin<\/a><\/li>\n\t\t\t\t\t\t<li ><a href=\"https:\/\/www.wisconsin.edu\/economic-development\/economic-impact-study\/uw-system-impact-on-state-and-local-taxes\/\">UW System Impact on State and Local Taxes<\/a><\/li>\n\t\t\t\t\t\t<li ><a href=\"https:\/\/www.wisconsin.edu\/economic-development\/economic-impact-study\/who-benefits-from-uw-system-economic-activity\/\">Who Benefits from UW System Economic Activity?<\/a><\/li>\n\t\t\t\t\t\t<li ><a href=\"https:\/\/www.wisconsin.edu\/economic-development\/economic-impact-study\/leveraging-state-investment-in-the-uw-system\/\">Leveraging State Investment in the UW System<\/a><\/li>\n\t\t\t\t\t\t<li ><a href=\"https:\/\/www.wisconsin.edu\/economic-development\/economic-impact-study\/uw-system-economic-impact-beyond-the-traditional-numbers\/\">UW System Economic Impact: Beyond the Traditional Numbers<\/a><\/li>\n\t\t\t\t\t\t<li ><a href=\"https:\/\/www.wisconsin.edu\/economic-development\/economic-impact-study\/methodology-for-this-study\/\">Methodology for this Study<\/a><\/li>\n\t\t\t\t\t\t<li ><a href=\"https:\/\/www.wisconsin.edu\/economic-development\/economic-impact-study\/conclusion-and-context\/\">Conclusion and Context<\/a><\/li>\n\t\t\t\n\t\t\t\t\t<\/ul><!-- \/cfct-module-loop-subpages menu nav -->    <\/nav>\n<\/div>\n<\/div>\n\t\t\t<\/div><\/div><div class=\"col-md-9 cfct-block\">\n\t\t\t<div class=\"cfct-module cfct-heading\">\n\t\t\t\t<h1 class=\"cfct-mod-title\">Methodology for this Study<\/h1>\n\t\t\t<\/div>\n\t\t\t<div class=\"cfct-module uwsa-rich-text\">\n\t\t\t\t<div class=\"cfct-mod-content copy\"><p>To identify and estimate the total economic contribution that a\u00a0project, business entity, or activity makes to the local, regional,\u00a0and state economies, it is necessary to look beyond the direct\u00a0expenditures made by the business or activity itself. There is an\u00a0economic \u201cripple effect\u201d of the expenditures made for goods and\u00a0services related to the business or activity. Spending cycles through\u00a0the economy as direct expenses, such as purchases made at the\u00a0grocery store, which are in turn paid out as wages to store workers,\u00a0who in turn spend money. Wages paid to workers are spent on\u00a0housing, food, clothing, entertainment, etc. This multiplier effect is\u00a0accounted for both in terms of indirect effects of the direct spending,\u00a0as well as induced effects (essentially, the further effects of the\u00a0indirect spending) to calculate total economic impact.<\/p>\n<p>The \u201cmultiplier effect\u201d refers to the recurrent economic activity\u00a0generated by an initial expenditure. For example, money spent\u00a0directly on construction will cycle through the local economy again\u00a0as wages to workers, purchases of construction materials (such\u00a0as lumber, tools, and nails), gasoline for machinery, and worker\u00a0transportation. The initial wave of spending generates a second\u00a0and third wave of spending as wages paid and profits made on the\u00a0direct construction spending spin through the economy in several\u00a0cycles. Thus, the original direct expenditure yields a greater economic\u00a0impact than just the money initially spent. Some money \u201cleaks out\u201d\u00a0of the regional economy at each level because of spending made\u00a0outside the area (for example, some goods may be purchased from\u00a0another state). As a result, the subsequent spending cycles decrease\u00a0in impact.<\/p>\n<p>This study quantifies the total annual economic contribution of\u00a0spending related to the University of Wisconsin System, including its\u00a0campuses and\u00a0 related organizations and activities. The spending of\u00a0UW System students, employees, and visitors, as well as spending\u00a0on university operations, was compiled from various sources.\u00a0The UW System budget\u00a0office supplied university\u00a0spending data. Student\u00a0spending data was derived\u00a0from prior NorthStar\u00a0studies that included\u00a0student expenditure\u00a0surveys at several UW\u00a0System campuses. This\u00a0data in turn is processed\u00a0in an econometric model\u00a0to produce estimates of\u00a0economic impact, jobs, and\u00a0tax revenues.<\/p>\n<blockquote><p>The study quantifies\u00a0the total economic\u00a0contribution of\u00a0spending related to the\u00a0UW System.<\/p><\/blockquote>\n<p>Economic multiplier models\u00a0(sometimes called Input\/Output models) are the framework for\u00a0analyzing economic impact. Derived mathematically, these models\u00a0estimate the magnitude and distribution of economic impacts,\u00a0and measure three types of effects: direct, indirect, and induced\u00a0changes within the economy. Direct effects are determined by the\u00a0amount of the initial spending. Indirect effects are determined by\u00a0the amount of the direct effect spending within the study region on\u00a0supplies, services, labor, and taxes. Finally, the induced effect measures\u00a0the money that is re-spent in the study area as a result of spending\u00a0from the indirect effect. Each of these steps recognizes that some\u00a0money \u201cleaks out\u201d of the economic study region through purchases\u00a0made outside the defined area. Eventually these leakages will slow or\u00a0stop the cycle.<\/p>\n<p><a href=\"https:\/\/www.wisconsin.edu\/economic-development\/wp-content\/uploads\/sites\/145\/2018\/08\/IMPLAN-logo.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-1115 size-full\" src=\"https:\/\/www.wisconsin.edu\/economic-development\/wp-content\/uploads\/sites\/145\/2018\/08\/IMPLAN-logo.png\" alt=\"IMPLAN logo: Make an Impact: Economic impact is calculated using the IMPLAN economic impact modeling system from the IMPLAN Group. IMPLAN is used to create detailed social accounting matrices and multiplier models of local economies. IMPLAN Group provides region-specific data to enable users to make in-depth examinations of state, multi-county, county, sub-county, and metropolitan regional economies. IMPLAN Group has been developing complex localized databases and distributing IMPLAN\u00ae software to public and private organizations since 1993.\" width=\"440\" height=\"270\" srcset=\"https:\/\/www.wisconsin.edu\/economic-development\/wp-content\/uploads\/sites\/145\/2018\/08\/IMPLAN-logo.png 440w, https:\/\/www.wisconsin.edu\/economic-development\/wp-content\/uploads\/sites\/145\/2018\/08\/IMPLAN-logo-300x184.png 300w\" sizes=\"auto, (max-width: 440px) 100vw, 440px\" \/><\/a>For this project, the econometric model used is produced by the\u00a0IMPLAN Group, Inc. (IMPLAN). IMPLAN is the developer of the IMPLAN\u00ae\u00a0economic impact modeling system, which is used to create complete,\u00a0extremely detailed Social Accounting Matrices and Multiplier Models\u00a0of local economies. IMPLAN tools are in use by more than 2,000 public\u00a0and private institutions.\u00a0The University of Wisconsin\u2013Whitewater Fiscal and Economic Research\u00a0Center (FERC) was engaged to run the economic impact numbers. FERC\u00a0uses the IMPLAN model and regularly updates the multipliers used\u00a0in the model. Dr. Russ Kashian, director of FERC, was very helpful in\u00a0running and analyzing the data in this study.<\/p>\n<\/div>\n\t\t\t<\/div><\/div><\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t","protected":false},"excerpt":{"rendered":"","protected":false},"author":44,"featured_media":0,"parent":895,"menu_order":8,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-912","page","type-page","status-publish","hentry","cfct-can-haz-build"],"_links":{"self":[{"href":"https:\/\/www.wisconsin.edu\/economic-development\/wp-json\/wp\/v2\/pages\/912","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.wisconsin.edu\/economic-development\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.wisconsin.edu\/economic-development\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.wisconsin.edu\/economic-development\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/www.wisconsin.edu\/economic-development\/wp-json\/wp\/v2\/comments?post=912"}],"version-history":[{"count":20,"href":"https:\/\/www.wisconsin.edu\/economic-development\/wp-json\/wp\/v2\/pages\/912\/revisions"}],"predecessor-version":[{"id":1134,"href":"https:\/\/www.wisconsin.edu\/economic-development\/wp-json\/wp\/v2\/pages\/912\/revisions\/1134"}],"up":[{"embeddable":true,"href":"https:\/\/www.wisconsin.edu\/economic-development\/wp-json\/wp\/v2\/pages\/895"}],"wp:attachment":[{"href":"https:\/\/www.wisconsin.edu\/economic-development\/wp-json\/wp\/v2\/media?parent=912"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}