O F F I C E O F T H E C H A N C E L L O R

ECU’s Economic Impact on the Region and the State

O U R S H A R E D D I R E C T I O N

1

This economic impact study confirms what we have believed for some time. East Carolina University’s economic impact is significant,

especially in our home territory of eastern North Carolina. During my travels, I often hear others refer to ECU as the “economic engine of the East” or the “beacon of hope.” Our mission is to serve as a national model for regional transformation. We are committed to this. Our economic impact is only one dimension of that commitment, but it is a very important one.

I want to thank Professor Wubneh for completing this study. We hope you will find it informative, and we invite your comments.

Steve BallardChancellor

From the Chancellor

2

A project of this magnitude could not have been completed without the support of many individuals. Mickey Dowdy and Clint Bailey

of ECU University Advancement and Marketing and Publications, respectively, were very helpful in providing advice and encouragement and in reviewing drafts of the report. Many university staff members were very generous with their time in providing information needed for the analysis. I am especially thankful to Kelly Harding of the AF Financial Reporting Administration, Diana Lys of the College of Education, Mary Holland of the College of Nursing, Greg Prince of the ECU Medical & Health Sciences Foundation, Lee Workman of the Athletics Office, Chris Buddo of the School of Music, Aaron Lucier of Campus Living, Ted Morris of Engagement, Innovation and Economic Development, and Marti Van Scott of Research and Graduate Studies. Your support and enthusiasm in providing information is greatly appreciated. In addition, I wish to thank Debbie Vargas of the Greenville Convention and Visitors Bureau for the information on hotel occupancy and daily expense rates. I also want to thank Brenda Wilson of the planning program in the Department of Geography for reviewing drafts of the report and Matthew Carey, a graduate student, for drafting the maps. Last, but not least, I want to thank Chancellor Ballard for giving me the opportunity to work on this project.

Mulatu Wubneh Greenville, North Carolina 2011

Acknowledgements

3

Executive Summary 5ECU as an Engine of Economic Growth 5ECU By the Numbers 6

ECU’s Economic Impact on the Region and the State 7

Introduction: The Report 7Part One: Background 8

ECU as an Institutional Enterprise 8

Mission, Values, and Strategic Directions 8

Students, Graduation, and Work-Life Earnings 9

Alumni 11

Faculty and Staff 12

ECU as a Regional Economic Anchor 13

Part Two: Economic Operations of the University 14

Revenue and Operating Expenditures 14

Employment and Payroll 15

Capital Costs 15

Part Three: Economic Impact 16Economic Impact Analysis 16

Multipliers 17

Geographic Area 17

Economic Impact Estimates 18 Nonpayroll Direct Spending 18 Payroll Impact 18 Capital Expenditure 19 Student Spending 19 Visitors Spending 20Athletics Spending 21Nonathletics Spending 22

Summary 22

ECU and Return on Investment to the State 22

Part Four: ECU in the Community 23Human Capital and Economic Prosperity 23

Teachers 23Health Professionals 24

Arts, Culture, and Entertainment 25

Research and Creative Activity 25Conclusion 26Notes 27Appendix 28

Table of Contents

4

5

ECU as an Engine of Economic Growth

•Withatotalemploymentof 5,343in2009,ECUisthe second-largest employer in Pitt County behind Pitt County Memorial Hospital.

•Factoringdirectspendingbytheuniversityanditsconstituents (students, faculty, staff, and visitors), and “themultipliereffect”of theirspending,ECUin2009generatedatotaleconomicimpactof $1.834billionineastern North Carolina with a multiplier of 1.8. This impact translates into a total statewideoutputimpactof $3.3billion.

•Abreakdownof theimpactshowsthatemployeespendingaccountedfor39percent;students,33percent;university(nonpayrollspending),19percent;capitalexpenditure,6percent;andvisitors,3percent of the total economic impact.

•Thetotalemploymentimpactof spendingby the university and its constituents in 2009was17,585.

•Inthelastfiveyears(2006–2010),ECUspentanaverageof $56.5millionperyearon construction, directly generating 1,170 jobs. Total capital expenditure for the five years amounted to $282 million.

•Intermsof regionalimpact,about50percent of the payment for capital expenses was made to vendors with an eastern North Carolina location.

•Intermsof returnsoninvestment,ECUgeneratesatotalof $13.64foreachdollarinvestedbythestate.

Executive Summary

Nonpayroll Spending$353,571,710

4,373

Employee Spending$707,783,840

3,463

Capital Expenditure$107,856,770

1,170

Student Spending$601,231,170

7,787

Visitors Spending$63,722,930

792

32.8%

5.9%

19.3%

3.5%

38.6%

KEYCategory$ Impact

Employment Impact

TOTAL $1,834,166,420 17,585

Summary of Economic Impact

$242 MillionState Appropriations

$3.3 BillionECU’s Economic

Impact to the State

6

ECU By the Numbers

•Withanenrollmentof morethan27,000students,ECU is the third-largest institution in the University of North Carolina system.

•ECUhas13collegesandschoolsprovidingprogramsin education, humanities, social sciences, and several professional programs including business, nursing, medicine, technology, and engineering.

•Infiveyears(2005–2009),ECUhasgraduatedanaverageof 4,800studentsayear.

•ECUcontributestothedevelopmentof humancapitalby training community and business leaders, teachers, and health-care professionals as illustrated below:

n Outof ECU’s123,000livingalumniwhoseaddresses are known, more than 70 percent live in NorthCarolina;58percentof theseareintheEast.

n Many of the graduates from the liberal arts and basic science foundation programs, as well as those from professional programs such as business, technology and engineering, communications, human ecology, and health and human performance, are playing a leading role in building sustainable communities in the East.

n The College of Education prepares more teachers than any other institution in the UNC system. In nearly40percentof thecountiesintheEast,one-third of the teachers are ECU graduates.

n The College of Nursing ranks No. 1 in the number of nursing graduates working in the state. In several counties in the East, the demand for more nurses is met by ECU graduates.

n Sinceitsopeningin1977,theBrodySchoolof Medicinehasgraduatedmorethan1,900physicians;about 60 percent reside in North Carolina.

n The College of Business is one of four colleges in the state that offer fully online AACSB-accredited MBA programs.

n ECU’s distance education program is opening doors for more than 6,000 students who would otherwise might not have the opportunity to attend on-campus classes.

•ECUplaysanimportantroleinsustainingavibrantcultural community in the region. Through its fine arts programs,theSchoolof Musicin2010organized34ticketedand84nonticketedactivitiesinjazz,opera,concerts, music festivals, and children’s music programs.

•ECUspent$41millioninresearchin2009–2010,anincreaseof 44percentcomparedtofiguresin2004–2005.

•Fortheperiod2007–2009,ECUreported37newinventions, five new U.S. patents secured, and nine new U.S. patent applications filed.

7

Introduction: The Report

Even as East Carolina University has grown to a nationally recognized research university, its focus has remained on improving the quality of life in

easternNorthCarolina—all41countieseastof I-95—byacting as a major employer, purchaser, and provider of services across the region. The university is dedicated to having a direct, vital influence on the region of its roots and is focused on creating economic prosperity. It is a direction shared with the region we call home.

The following is an analysis of a study of the economic impact of East Carolina University (ECU) on the state of North Carolina and eastern North Carolina in particular. The objective is to quantify the economic influences of ECU on the East through the various activities and operations of the university. The direct expenditure by the university and its constituents (faculty, staff, students, and visitors) translates into increased economic activities resulting in growth in income and employment. By using a standard economic model, this study estimates the total economic impact of ECU on the eastern part of the state.

Much like other academic institutions, ECU generates additional economic impacts that are often difficult to quantify and hence are not captured by using dollar values. ECU contributes to the state’s economic growth

through an ongoing supply of skilled professionals in the form of doctors, nurses, teachers, and other business and community leaders. It also improves the quality of life for the people in the East through a variety of activities in the form of uncompensated health services; volunteer work of its employees and students; athletics, musical, and other cultural events; and scientific lectures, workshops, seminars, and other continuing education programs. This study explains some of these services under the section “ECU in the Community.”

The study is organized into four parts. Part One sets the stage with an introduction of current conditions at ECU. Part Two highlights the operation of the university, and Part Three estimates the indirect and induced or “multiplier” effects of the university’s and its constituents’ spending in eastern North Carolina. Most data used in thestudyarefrom2009,themostcomplete,up-to-dateinformation available. Part Four discusses the role of ECU in building sustainable communities—helping improve the quality of health and education, expanding educational opportunities, and supporting the development of local businesses and other communities. The conclusion projects the future by identifying the main reasons ECU’s contributions to the growth of the economy of the East could be even greater in the years ahead.

ECU’s Economic Impact on the Region and the State

8

ECU as an Institutional Enterprise

On March 27, 2007, ECU celebrated its centennial. In its first 100 years, ECU, which was once largely known as a college for training teachers,

transformed itself into the third-largest institution in the stateof NorthCarolina,with13collegesandschools.Many of these colleges and schools provide programs focusing on education, humanities, and social sciences, while others offer professional programs including business, medicine, nursing, and technology and engineering. At the same time, the institution has experienced major changes characterized by a significant increase in enrollment and the diversity of programs and personnel.

As ECU continues to move forward in a new century, it continues to clarify its mission and strategic objectives while maintaining its commitment to serve the state of North Carolina in general and eastern North Carolina in particular. Whether it is meeting the demand for more teachers and health-care professionals, improving the economic conditions and quality of life of the region, or providing world-class entertainment and inspiration, ECU has delivered on its promises to serve.

Mission, Values, and Strategic Directions

At the core of ECU’s mission is public service and regionaltransformation.Inthefallof 2009,ECUlaunched new strategic directions that will serve as a guide for future growth and development of the institution. These directions embody ECU’s enduring values that include respect, authenticity, accountability, teamwork, and commitment to service.

Located at the heart of eastern North Carolina, ECU is committed to extending the benefits of its research and scholarship to communities in the East. This commitment is visible in the work of education, the health sciences, and other social and physical science programs whose graduates are playing a major role in teaching, providing health services, and serving in a leadership position in the region. Other programs such as business, fine arts, music, communication, and community development

are contributing significantly to improving the economic condition and quality of life of the people in eastern North Carolina.

ECU maintains that it plans to become an “institution of the future,” willing to chart a new course and engage globally. Its mission statement states that ECU would serve as a model in service and transformation by “creating a strong, sustainable future for eastern North Carolina” and “improving the quality of life” in the region. In reaffirming its commitment to leadership and service to the state, ECU articulates that it will:

•producemoreandbetterteachersanddevelopbestpractices to improve public education in North Carolina,

•fosterstudentaccessandsuccessalongtheentirepre-kindergarten–20educationalcontinuum,

•expandandapplyitsexpertise,research,andoutreachfunctions to address regional and statewide problems related to the economy, the environment, energy, and water, among other topics,

•increasefacultyandstudentknowledge,motivation,andcapacity for scholarly instruction and learning, research, and engagement,

Part One: Background

ECU Colleges and Schools

Thomas Harriot College of Arts and Sciences

Brody School of Medicine

College of Allied Health Sciences

College of Business

College of Education

College of Fine Arts and Communication

College of Health and Human Performance

College of Human Ecology

College of Nursing

College of Technology and Computer Science

Honors College

School of Dental Medicine

Graduate School

9

•producemoreandbetterphysicians,dentists,nurses,andallied-health professionals to meet the expanding needs of North Carolina and beyond,

•createvibrantandlivablecommunitiesthroughthearts,athletics, and other cultural enrichment, and

•produceundergraduateandgraduatestudentswiththeskills, knowledge, expertise, and entrepreneurial drive that will help transform eastern North Carolina.

ECU’s mission is to serve as a model in service and transformation by creating a strong, sustainable future for eastern North Carolina. The university’s strategic directions outline the areas through which it will have the most impact.

•Education for a New Century: Preparing students to compete and succeed in the global economy

•The Leadership University: Distinguishing the university by the ability to train and prepare leaders for our state and nation

•Economic Prosperity in the East: Creating a strong sustainable future for the East through education,

innovation, investment, and outreach

•Health Care and Medical Innovation: Saving lives, curing diseases, and positively transforming the quality of health care for the region and the state

•The Arts, Culture, and Quality of Life: Providing world-class entertainment and powerful inspiration as we work together to sustain and improve the community’s quality of life

Students, Graduation, and Work-Life Earnings

The education of undergraduate and graduate students is central to the mission of ECU. In the fall of 2010, ECU enrolled more than 27,000 students, of which 78 percent were undergraduate students, 21 percent graduate and doctoral students, and 1 percent medical students. About 60percentof thestudentsarefemalesand40percentaremales. Minorities accounted for about 20 percent of the student body, and 12 percent were out-of-state students. More than 22 percent of the students are enrolled primarily in distance-education programs.

Undergraduate78%

Medical1.1%Graduate

20.9%

2010 Enrollment StatisticsTOTAL ENROLLMENT, FALL 2010: 27,873

In-state87.8%

Out-of-state12.2%

Nonminority73.1%

Other*7.2%

Minority19.6%

Female60.3%

Male39.7%

* Includes nonresident alien, race/ethnicity unknown, and two or more races

Source: Office of Institutional Planning and Research

10

During the past 10 years, enrollment at ECU has increased atanaverageannualrateof 4percent.Thisincreasehasput pressure on the university’s scarce resources and its capacity to expand facilities, both on the Main and Health Sciences campuses. The university has invested more than $280 million in capital expenditure in the last five years to accommodate the significant growth in enrollment.

One of the primary objectives of ECU is to help build the stock of human capital in the state by providing a wide range of educational opportunities for citizens to acquire skills and develop knowledge. ECU’s commitment to education extends beyond its classrooms. The university’s distance-education program serves more than 6,000 graduate and undergraduate students. The College of Business, College of Education, College of Fine Arts and Communication, College of Health and Human Performance, College of Nursing, and College of Technology and Computer Science have developed full-fledged degree programs to serve individuals who may not have easy access to campus programs. ECU also works directly with local schools, teachers, and parents to prepare the next generation of North Carolinians to succeed in a knowledge-based economy.

In the last five years, ECU has graduated anaverageof 4,800studentsannually.

These students are trained in various fields including education, arts and sciences, business, health-related fields, technology and computer science, fine arts and communication, and human ecology. A distribution of the 2009graduatesshowsthat18percentof thegraduatesreceived their degree in education, 17 percent in arts and sciences,16percentinhealth-relatedfields,13percentinbusiness,11percentinhumanecology,9percentinhealthand human performance, and 8 percent both in technology and computer science, and fine arts and communication.

Health-RelatedFields*

Arts and Sciences

Education

Fine Arts andCommunication

Technology andComputer Science

Health and Human Performance

Human Ecology

Business

9%

11%

16%

18%8%

17%

8%

13%

2009 Degrees ConferredTOTAL NUMBER OF GRADUATES OF SUMMER 2008, FALL 2008, AND SPRING 2009 = 5,497

*Includes medicine, nursing, and allied health

0 5 10 15 20 25 30

Thousands of Students

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

17,851

18,174

18,955

19,374

19,570

19,471

19,891

20,720

21,494

21,584

21,773

1 8 , 7 5 0

1 9 , 4 1 2

2 0 , 5 7 7

2 1 , 7 5 6

2 2 , 7 6 7

2 3 , 1 6 4

2 4 , 3 5 1

2 5 , 9 9 0

2 7, 6 7 7

2 7, 6 5 4

2 7, 8 7 3

899

1,238

1,622

2,382

3,197

3,693

4,460

5,270

6,183

6,070

6,100

Ye

ar

Enrollment at ECU, 2000–2010ON-CAMPUS OFF-CAMPUS

11

Perhaps one of the most tangible benefits associated with an educated labor force is the work-life earnings of students with degrees. According to the 2000 US Census, while workers with only a high school certificate wereexpectedtoearnanaverageincomeof $25,909peryear, those with bachelor’s degrees were expected to earn anaverageincomeof $45,394.Thehigherwage-earningcapacity shows that the average worker with a bachelor’s degreecanexpecttoearn$914,000morethantheircounterparts with high school diplomas over their work-lifetime. The benefits of graduates with more advanced

degrees compared to those with only high school diplomas are even much more significant as shown above.

Alumni

Alumni constitute ECU’s major asset. Out of ECU’s 123,000livingalumniwhoseaddressesareknown,morethan70percentresideinNorthCarolina,and58percentof these are in eastern North Carolina. In terms of contributions to communities, many of ECU’s alumni are playing prominent roles in various fields, including business, health care, the arts, media, and others.

0 1 2 3 4 5

Millions of Dollars

High School Diploma

Bachelor’s Degree

Master’s Degree

Doctoral Degree

Professional Degree

$25,909

$45,394

$54,547

$81,430

$99,253

$1,226,600

$2,140,900

$2,463,100

$3,440,000

$4,411,500

Estimates of Work-Life Earnings by Educational AttainmentAVERAGE ANNUAL EARNINGS/WORK-LIFETIME EARNINGS

Source: The Big Payoff: Educational Attainment and Synthetic Estimates of Work-Life Earnings US Census Bureau, July 2002

ECU Alumni per County

Total Number of ECU Alumni

100–299

300–499

500–699

700–899

900–1,099

1,100+0–99

12

Prominent ECU Alumni

• Rick Atkinson, journalist, author, and three-time Pulitzer Prize winner

• Scott Avett, musician and visual artist

• Ronnie Barnes, vice president of medical services, the NFL’s New York Giants

• Sandra Bullock, actor, Academy Award winner

• Velton Ray Bunch, Emmy Award-winning composer

• Lisa Callahan, MD, medical staff director, the NBA’s New York Knicks

• Beverly Cox, director of collection and exhibits, the National Portrait Gallery

• David Garrard, NFL player

• Beth Grant, actor

• Bob Greczyn, former CEO, Blue Cross Blue Shield of North Carolina

• Chris Johnson, NFL player, 2009 Offensive Player of the Year

• Kelly King, CEO, BB&T

• James Maynard, founder and CEO of Golden Corral restaurants

• Vince and Linda McMahon, founders and chief executives of World Wrestling Entertainment

• Sandra Mims-Rowe, retired editor, the Daily Oregonian, six-time Pulitzer Prize winner

• Dan Neil, the Los Angeles Times, Pulitzer Prize winner

• Gen. Gary L. North, commander, Pacific Air Forces USAF

• Margaret O’Connor, former photo editor, The New York Times, two-time Pulitzer Prize winner

• Emily Procter, actor, CSI Miami

• C. J. Wilson, NFL player, Green Bay Packers 2011 Super Bowl champion team

Faculty and Staff

ECU’s faculty are engaged in various activities including teaching, research, and service to the community. In the past 10 years, in response to the increasing enrollment and the corresponding demand for more classes, ECU has managed toincreasethenumberof facultybyabout3percentperyear. This increase was also partially fueled by the need for building a critical mass of research faculty in some areas identified as vital to meeting the strategic objectives of the

institution.Basedon2009data,thegeneralcharacteristicsof thefacultyshowthat21percentareprofessors,30percentassociateprofessors,34percentassistantprofessors,14percentinstructors,and1percentother.

ECU also employs other individuals with various skills andoccupationalattributes.The2009employmentdistributionshowsthatwhile33percentarefaculty,25percentareprofessionals,21percentclerical,4percentadministrators, and 17 percent other professionals.

Clerical

Other

Administrators

Faculty

Professional

4%

17%8%

21%

33%

25%

Employees by Occupational Category, 2009

Professor

Instructor

Other

AssistantProfessor

Associate Professor

1%14%

21%

34%

30%

Faculty by Rank, 2009

13

ECU as a Regional Economic Anchor

ECU has become not only the center of educational and cultural activities but also the engine of economic growth for the region through its role as employer, purchaser of goods and services, real-estate developer, advisor/network builder, and workforce educator. As one of the leading employersinthecounty,ECUbringsinabout$696millionannually,morethan4.0timesthetotalrevenueof

that of Pitt County and 8.8 times of that of the City of Greenville.

Intermsof employment,with5,343employees,ECUranks second in the county after Pitt County Memorial Hospital,whichhas7,373employees.In2009,ECUandPitt County Memorial Hospital accounted for 7.7 percent and 10.6 percent respectively of the total employment in the county.

0 500 1,000 1,500 2,000

Total Faculty

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

1 , 3 0 0

1 , 3 5 5

1 , 3 8 0

1 , 4 6 3

1 , 5 8 9

1 , 6 0 6

1 , 7 0 0

1 , 7 1 1

1 , 8 0 4

1 , 7 8 2

1 , 7 5 0

Ye

ar

Faculty, 2000–2010

0 100 200 300 400 500 600 700 800Millions of Dollars

East Carolina University

Pitt County

City of Greenville

$696

$172

$78

2009 Comparative Revenue(in millions)

0 10 20 30 40 50 60 70 80Thousands of Employees

East Carolina University

Pitt County Memorial Hospital

City of Greenville

Pitt County

5,343

7,373

23,019 50,963

21,150 48,669

2009 Comparative EmploymentFEDERAL, STATE, AND LOCAL/PRIVATE INDUSTRY

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Revenue and Operating Expenditures

ECU is a significant economic force by virtue of its position as a major employer and purchaser of goods and services in the East. The impact of

the university on the local economy can be measured, in some ways, by the amount of revenue it injects into the regionaleconomy.In2009,EastCarolinaUniversitygeneratedmorethan$696millioninrevenue.Of this,$400millionwasoperatingrevenue,whichcamelargelyfrom student tuition fees (18.0 percent), patient services (20.8percent),auxiliaryservices(12.4percent),andgrantsandothercontracts(5.9percent).Withthestateappropriationof $242million(accountingfor35.0percentof therevenue),totalrevenueroseto$642million. The remaining revenues came from gifts, interest earned, and other operating revenues.

The2009stateappropriationof $242millionshowsa10-percent decline from the 2008 figure of $268 million, thus reflecting the financial difficulties that the state continues to face. Despite these challenges, ECU is still the largest source of revenue in the region.

Intermsof expenditure,in2009,theuniversityspent$695millioninoperatingexpenses.Abreakdownof the expenses into the respective categories shows that a majority of the expenses was for salaries and benefits (67 percent),followedbyservices(13percent)andsuppliesand materials (10 percent).

Itisimportanttonotethatthe$695milliontotalexpensereflectsthecashoutlayin2009;itdoesnotincludecapitalexpenses. For the purpose of evaluating ECU’s economic impact, capital expenses will be evaluated separate from operating expenses because capital expense allocations are based on multiyear scheduling. Similarly, since salaries and benefits account for the largest share of the operating expenses, and employees’ expenses have problems of leakage from the regional economy—the expenses associated with the purchase of goods and services outside the region—salaries and benefits will also be examined under a different category.

Thus, after making the necessary adjustments—taking out salaries and benefits—the remaining operating expenditure of theuniversityin2009was$189million.

Student tuition and fees

$125,070.00

Other(gifts, interest earned, other

operating revenues)$56,336.70

State appropriations$241,751.80

Auxiliaries$86,465.60

Grants andcontracts

$40,921.40

Patient services$145,123.50

2009 Revenue

Total $695,669

18.0%

20.8%

12.4%

5.9%

35.0%

7.9%Depreciation

Scholarshipsand fellowships

Utilities

Services

Supplies andmaterials

Salaries and benefits

2009 Operating Expenditures

3%

67%

10%

4%

13%

3%

Total $694,975

Part Two: Economic Operations of the University

15

Employment and Payroll

In2009,ECUpaidout$466millioninsalariesandbenefitstoits5,343employees.Theexpenditurebytheseemployees, along with expenditures by students and visitors, generates additional jobs that support the region’s economy. One of the major manpower contributions of ECU is its capacity to attract highly qualified professionals with expertise and knowledge in various fields. As a result, on a per capita basis, Pitt County and its surrounding areas have more highly skilled professionals than any other area in eastern North Carolina.

Capital Costs

ECU has spent more than $282 million in the last five years to finance capital projects such as the construction of the East Carolina Heart Institute at ECU, the Health Sciences Library, and West End Dining Hall; additions to Fletcher Music Center and the Rivers Building; and maintenance and renovation of a number of other facilities.

In terms of regional impact, according to ECU Administration and Finance, close to half of the payment for capital expenses (for instance, more than $20 million in2009)wasmadetovendorswithaneasternNorthCarolina location.

0 10 20 30 40 50 60 70 80

Millions of Dollars

2006

2007

2008

2009

2010

$75,701,943.91

$43,531,591.99

$54,276,318.07

$41,222,206.99

$67,674,552.07

2006–2010 Capital Expenditure

Source: ECU Administration and Finance

16

Economic Impact Analysis

Both the level and spending patterns by the university and its constituents—faculty and staff, students, and visitors—must be taken into account

when estimating the economic impact of ECU. One method that has been widely used to trace the economic impact of institutions across various sectors of an economy is the input-output (I/O) model.1 The I/O provides a general framework for measuring the links among the various sectors of the economy at the national, regional, or local levels.

The I/O framework also helps to develop the multiplier, which can be used to estimate the ripple effects of investments or expenditure by different groups. Hence, in an empirical analysis, the overall impact of expenditure by ECU, its faculty, staff, students, and visitors can be estimated by using the I/O multiplier.

Data on operation expenditures and wages and salaries paid to employees can be utilized to provide the full range of impact by the university on the local economy. The

spending by the university and other groups is viewed as a change in the “final demand,” which sets in motion a series of additional spending resulting in an increase in total output, earnings, and employment. These impacts are often represented as direct, indirect, and induced impacts as shown above.

Part Three: Economic Impact

Major Components of an Economic Impact

• Direct impact: Expenditures by the university, employees, students, and visitors injected directly into the regional economy

• Indirect impact: The ripple effects resulting from the direct expenditure based on input-output model representing interindustry links

• Induced impact: Impact of household expenditures generated as employees spend a portion of their wages and salaries

• Total impact: The sum of the direct, indirect, and induced effects

NonpayrollExpenditure

EmployeeSpending

StudentSpending

VisitorSpending

CapitalExpenditure

MultiplierEffect

INCOME• Direct• Indirect• Induced

EMPLOYMENT

INCOME IMPACT EMPLOYMENT IMPACT

17

There are several input-output models that can be used to estimate impacts. RIMS II (Regional Input Output Modeling System II) is one of these models that can be used to estimate the economic impact of the university. It is based on the national I/O model, which is then converted to a regional model by using the location quotient (LQ) as a weighing technique.2 The spending by the various groups—university, employees, students, and visitors—goes through cycles of change resulting in an increase in total output and employment. Other models widely used are IMPLAN and REMI models.3

Multipliers

The multiplier seeks to quantify the total changes in the economy resulting from a given economic stimulus. Each multiplier can be viewed as measure of the strength of the economic links between a given sector (for example, education/ECU) and the rest of the regional economy. The greater the size of the multiplier, the greater the impact. For instance, if $1.00 spent by ECU, after a cycle of changes, resultsinatotalspendingimpactof $2.50,thentheoutputmultiplierof ECU’sexpenditurewouldbe2.5.

In the case of ECU, the multipliers were derived from theregionalmodelforeasternNorthCarolina(the41countieseastof I-95)estimatedforthispurposebasedon the RIMS II model.4 For instance, the multipliers used for the operations expenditure of the university—nonpayroll spending that includes supplies and materials, services,utilities,etc.—was.35forindirecteffectsand.52for induced effects which, with the original 1.00 direct effect, totals 1.87. This means that for every $1.00 in operation expenses by the university, $1.87 is generated in the eastern North Carolina economy. However, the university has many different activities and groups (faculty, staff, students, and visitors) that spend money in the local economy, and each of these activities and groups has a unique multiplier, leading to different multipliers across campus. These unique multipliers were derived from the regional multiplier for eastern North Carolina based on RIMS II model,andtheyrangefrom1.63to2.47.

These multipliers are comparable to the figures recommended by the American Council of Education based on the works of Caffrey and Isaacs and those used in estimating the

economic impact of many institutions.5 For instance, according to Tripp Umbach, a major consulting firm that has conducted an economic impact analysis of several academic institutions including Penn State, Ohio State, and universities of Alabama (Birmingham), Iowa, and Washington, multipliers for analyzing the impact of state universitiescanrangefrom1.8forlocalto2.3forstateimpacts.6

Geographic Area

One of the major decisions in conducting an impact study is on how to define the geographic area that would be directly impacted by local spending. Although some studiesinclude29countiestodefineeasternNorthCarolina, for the purpose of this analysis, we decided to definetheregiontomorebroadlyincludeall41countieseastof I-95.Thesecountiesaccountedforaboutone-thirdof theestimatedstatepopulationin2009.Someof thecounties in this area have historically suffered from decline in both population and economic development. Data on development indicators show that many of the counties in this region lag behind the average for the state in population growth and economic development including per capita income, employment in manufacturing and services, percentage of adults with no high school or college education, and number of physicians and registered nurses per 10,000 population.

PittBeaufort

CravenLenoir

Greene

Wayne

Duplin

Harnett

Sampson

Scotland

Johnston

GatesCamden

Pasquotank

Perquimans

CurrituckNorthampton

Halifax

Nash Edgecombe

CumberlandHoke

Wilson

PamlicoJones

CarteretOnslow

PenderBladen

Brunswick

NewHanover

Columbus

Robeson

WashingtonTyrrell

Hyde

DareMartin

Bertie Chowan

Hertford

Eastern North Carolina Counties

18

Economic Impact Estimates

Nonpayroll Direct Spending

ECU’snonpayrollexpenditureforfiscalyear2009was$189million,whichrepresentsabout27percentof theuniversity’stotalexpenditure.The$189millionwasderived after adjustments were made to exclude scholarships and fellowships (to avoid double counting with student expenditure), and depreciation (which does not show any tangibleimpacts).The$189milliondirectexpenditure,after several cycles of change in the economy, will generate a totalimpactof $354millionandanemploymentof 4,373.

Payroll Impact

In2009,ECUspentatotalgrosssalaryandbenefits

of $466million,whichaccountsformorethantwo-thirds of the total university expenditure. Since salary expensesincludebenefits(about15percent),thebenefitswere excluded to make adjustments. Another important element in estimating the payroll expenses is leakage. In any regional account, a certain amount of the dollar spent locally is “withdrawn” from the responding cycle as a portion of the dollars will “leak” out of the economy. Leakage is often associated with spending for the purchase of goods and services not produced locally, i.e., imports, increased tax payments, and other forms of nonlocal expenditures.

The empirical value of “leakage” prevailing in a local economy can vary depending on the size and nature of

Demographics Education

Economy Health

North Carolina9,380,900(estimated)

2000–09 Population Change

8.0%

Eastern NC Counties2,657,800(estimated)

2000–09 Population Change

7.2%

0 10 20 30 40 50 60 70 80

High-School Education or Higher (25+)

College Education (25+)

74.5%

78.1%

14.4%

22.5%

NORTH CAROLINA/EASTERN NORTH CAROLINA COUNTIES

Socioeconomic Profile of Eastern North Carolina

Expenditure Per Pupil

Dropout Rate

Percent of Population

0 10 20 30 40 50 60 70 80

Primary Care Physicians

RegisteredNurses

6

7

68

73

Per 10,000 Population

Percent of Students Attending

8.78 9.25

0 20 40 60 80 100

1.54

1.60

Per CapitaIncome

Thousands of Dollars

0 5 10 15 20 25 30 35

30,991

31,255

0 5 10Percent of Population

15 20 25

PovertyRate

UnemploymentRate

FarmEmployment

ManufacturingEmployment

ServiceEmployment

20.2%18.32%

10.37%11.06%

5.01%4.3%

13.8%18.1%

22.72%23.8%

Source: NC State Data Center. Computation by Mulatu Wubneh.

19

the local economy and the general economic characteristics of the region. For instance, for areas depending on tourism, the average leakageratecanvarybetween30to40percent,leavinga“capturerate” (the percentage of expenditure remaining in the region) of 70 to 60 percent. Based on the Bureau of Labor Statistics (BLS) guidelines for a region, we assume that the “capture rate” of employee expenses inourregionis90percent.Hence,thetotal2009payrollexpenditureafter the adjustments have been made was$356million.Thepayrolltotaleconomic impact amounted to $708 million, and the employment impact was3,463.

Capital Expenditure

Since capital projects are financed and depreciated over a long period of time, we decided to use the average figure for the last five years to estimate the impact of capital expenses. ECU spent an average of $56.5millionforcapitalprojectsinthelastfiveyears,2006–2010.Thetotal economic impact based on the average capital expenditure was $108 million and the employment impact was 1,170.

Student Spending

The student spending is estimated by using data from the Financial Aid office that is used as a guide to expected educational expenses to attend ECU. The figures are based on staff estimates, feedback from students, and national trends on the cost of education. Annual adjustments are made to reflect increase in cost of education. The Financial Aid office figures disaggregate expected expenses for campus residents, noncampus

Services$88,771,320

CapitalEquipment*$7,904,000

Supplies and Materials

$71,346,640

Utilities$21,003,280

Nonpayroll Direct Impact

Indirect$66,801,520

Induced$97,744,950

*Equipment with prices over $500

Total $189,025,240

Total Impact $353,571,710 Employment Impact 4,373

Total $164,546,470

Gross Salary and Benefits$465,888,330

Salary After Adjustments$356,404,570

Economic Impact of Employee Spending

Indirect$88,174,490

Induced$263,206,780

Total Impact $707,783,840 Employment Impact 3,463

Construction(Average for five years)

$56,481,340

Capital Expenditure Impact

Indirect$23,588,370Induced

$27,817,060

Total Impact $107,856,770 Employment Impact 1,170

20

residents, and undergraduate and graduate distance-education students. Similarly, costs for medical students were derived from the Brody School of Medicine’s financial-aid data that was averaged over four years of medical school.

The use of estimated cost-of-education figures—in cases in which survey data on student expenses are not readily available—is a common practice in university economic impact assessment. This method has been used in the economic impact studies of other institutions including Boston University, Notre Dame University, and Bowling Green University, to name a few.

Data on the number of students residing on campus was provided by ECU Campus Living. Based on enrollment

figuresfor2009,thestudycalculated the number of students residing off campus (commuters) and those taking distance-education classes. Student spending impacts various businesses including food services, food and drink establishments, retail, rental and real estate, amusement and recreation, and accommodation. The total impact on these sectors reflects the economic impact of student spending. Assuming that student purchases are made within the region and that expenditures are school-related, cost-of-living expenses such as food, clothing, transportation, etc., the study estimates that the total impact of student spending is $601 million and it supports 7,787 employees.

Visitors Spending

Estimating visitors spending is often a difficult challenge because of problems with developing accurate numbers of visitors attending various university events—academic, athletics, community, and cultural activities. To get an accurate estimate, one has to conduct a survey; but often, cost considerations preclude the survey approach.

An alternative option for estimating visitors spending in a regional university would be to base it on the number of visitors per student and faculty member. The number of visitors for students and faculty are used as a proxy for all visitor categories. While the student visitors may include parents, other family members, and friends, faculty visitors may include professional colleagues attending conferences, seminars, and other academic activities sponsored by faculty. Per capita student and faculty visitors approach is used in other studies including those mentioned above: Boston, Notre Dame, and Bowling Green (OH).

Based on figures used in the impact studies on the above universities, it is assumed that, on the average, undergraduate

Undergraduate$249,622,840

Graduate(including

medical students)$84,989,320

Student Spending Impact

Indirect$102,324,400Induced

$164,294,570

Total Impact $601,231,140 Employment Impact 7,787

UndergraduateStudents

$27,680,820

GraduateStudents

$3,996,420

V I S I T O R S O F :

Visitor Spending Impact

Indirect$14,233,700Induced

$16,279,420

Total Impact $63,722,890 Employment Impact 792

Faculty$1,532,520

21

students have six overnight visitors, graduate students have three overnight visitors, and faculty have four overnight visitors in a given academic year. Since staff visitors are assumed to stay with friends rather than in a hotel, they are not included in the analysis. The figures for graduate students and faculty are smaller because it is assumed that some of these overnight visitors may be staying as guests in faculty and graduate students’ residences.

Basedon2009enrollmentdataanddaily expense estimates from the North Carolina Division of Tourism, Film, and Sports Development and the Greenville Convention and Visitors Bureau, this study estimates that visitors spending wouldamountto$64millionperyear. Since visitors spending impacts primarily sectors such as retail, hotel and other accommodation services, and ground transportation, we used the impact on these sectors to estimate the total economic and employment impact generated by visitors.

Although visitors-spending impact shows the total for the various types of university activities, it is possible to divide the total impact into those impacts based on athletics and nonathletics events spending as indicated below.

Athletics SpendingBased on information provided by the ECU Athletics Office, total attendance forfootballhomegamesfor2009was259,143.Thisrepresentsanaverageattendanceof 43,000pergameforsix home games. A breakdown of the attendance shows that about 10,000(23percent)werestudents,22percentwerelocals,51percentwereday-tripvisitors,and4percentwere overnight guests. Overnight attendees were estimated based on local hotel occupancy rates to separate those staying with a friend or relative and those staying in a commercial accommodation/hotel. The point of

using these various assumptions is to reach a reasonable estimate for each category of attendees.

Based on cost estimates provided by the NC Division of Tourism, Film, and Sports Development and the Greenville Convention and Visitors Bureau, we estimated the total expenditure for each of the three groups—

Football Spending$12,862,060

Athletics Activities Spending Impact

Indirect$4,203,320Induced

$5,018,780

Total Impact $22,084,160 Employment Impact 307

Other Sports Spending$6,603,070

Indirect$2,169,770Induced

$2,576,520

Total Impact $11,349,360 Employment Impact 157

Total Spending$13,744,620

Nonathletics Activities/Events Spending Impact

Indirect$7,860,610Induced

$8,684,130

Total Impact $30,289,360 Employment Impact 328

22

local, day-trip, and overnight attendees. Similarly, we used the attendance figures for other nonfootball sports to calculate the total expenditure for local and day-trip groups. In contrast to football, we assumed that there are no overnight attendees for other sports. Specific assumptions related to the proportion of in- and out-of-town attendees had to be made because of the nature of the sport. The chart on page 21 gives the total spending of football and other sports, and the resulting income and employment impacts.

Nonathletics Events/Activities Spending ECU has a number of nonathletic events organized by various departments and colleges in the form of music and other cultural activities, scientific lectures, seminars,

campus visits by prospective students and their parents, commencement, and other student-focused activities. Since it is very difficult to estimate the total spending by visitors to these kinds of activities, we used the indirect method of estimating visitors spending based on the number of visitors per student and faculty member. The assumption is that the total of athletics and nonathletics events spending equals total spending by visitors.

Summary

The total dollar value of output and employment impact of ECU equals the impact generated by the different groups—nonpayroll university, employee, capital, students, and visitors spending as shown below.

0 100 200 300 400 500 600 700 800

Millions of Dollars

Nonpayroll Spending

Employee Spending

Capital Expenditure

Student Spending

Visitors Spending

$353,571,710 / 4,373

$707,783,840 / 3,463

$107,856,770 / 1,170

$601,231,170 / 7,787

$63,722,930 / 792

SummaryDIRECT/INDIRECT/INDUCED / $ TOTAL / EMPLOYMENT TOTAL

ECU and Return on Investment to the State

As a result of expenditures on goods and services by the university and its constituents, the overall economic impact of ECU’s operations on eastern North Carolina in 2009was$1.834billionwithamultiplierof 1.8.Basedon this, one can estimate the return on investment to the

stateof NorthCarolina.In2009,ECUreceived$242million in state appropriations from the state, and the total statewide economic impact of the university for the sameperiodwas$3.301billion.Hence,thereturnonthestate’sinvestmentwouldbe$13.64forevery$1.00of state appropriations.

$242 MillionState Appropriations

$3.3 BillionECU’s Economic

Impact to the State

23

Part Four: ECU in the Community

True to its motto, Servire, meaning To Serve, ECU makes a concerted effort to contribute positively to sustainable development in eastern North

Carolina. Its mission focuses on preparing the leaders of tomorrow, meeting the demand for more teachers and health professionals, promoting economic development, and improving the quality of life of the people in the region. These tangible benefits will be realized as ECU continues to make a qualitative transformation of its academic programs and strives to become a “model” institution that is willing to engage nationally and globally. The following discussion highlights the major economic impacts that are often not captured by using standard economic models.

Human Capital and Economic Prosperity

•Theliberalartsandbasicsciencefoundationprogramsprepare graduates to pursue further graduate education or to assume leadership positions in their communities.

•Promotingeconomicdevelopmentintheregionisamajor mission of ECU; many of the graduates from professional programs such as business, technology and engineering, communications, and human ecology are playing a leading role in building sustainable development in the region.

•ECU’sCollegeof Businessisoneof four(alongwithUNC–ChapelHill,NCStateUniversity,andFayetteville State University) MBA programs in the state offered fully online and accredited by the Association to Advance Collegiate Schools of Business (AACSB). There are 18 AACSB-accredited MBA programs in the state.

•ECU’sdistance-educationprogramisopeningdoorsfor more than 6,000 students who otherwise might not have the opportunity to attend regular classes because of distance, family commitment, or work responsibilities.

•Theengagementandoutreachprogram(initiatedin2008) has made a major stride in graduating students who are playing major roles in their communities—addressing problems related to improving educational systems, disaster preparedness, and assistance for migrant workers.

Teachers

The College of Education is one of the oldest academic unitsonECU’scampus.Priorto1967,ECUwaslargelyknown as a teacher-training college. Today, the College of Education has programs that focus on training teachers, counselors, administrators, and educational leaders who play a major role in meeting the educational manpower needs of the state.

Teachers from ECU per School District

Percentage of ECU Teachers

1–5

6–10

11–20

21–30

31–40

41+0

24

•TheECUCollegeof Educationpreparesmoreteachersthan any other institution in the North Carolina higher-education system.

•Insomeof thecountiesintheEast—Beaufort,Greene,Lenoir, Martin, and Pitt—more than 60 percent of the teachers working in the school system are ECU graduates.

•Overall,innearly40percentof thecountiesintheEast,one out of every three teachers is an ECU graduate.

Health Professionals

Historically, eastern North Carolina has lagged behind the rest of the state in the availability of health professionals such as doctors, nurses, and other health-service workers. Some of the counties in the East are also leading the nation in incidence of heart disease, diabetes, and other metabolic illnesses.

Intheearly1970s,thestatelegislaturechargedECUto play a major role in improving the supply of trained health professionals in the East. Accordingly, ECU initiated a number of health-related programs to train these health professionals. The result has been a significant improvement in the supply of health professionals in the region as illustrated below.

•Since1977,whentheBrodySchoolof Medicineenrolleditsfirstclass,morethan1,900physicianshavegraduated from the school and about 60 percent of these graduates are residing in the state.

•If “otheralumni”(thosewhocompletedtheirmedicalresidency at Brody, those with PhDs, and master’s degrees in public health) are taken into account, the

total number of health-related professionals trained at ECUreaches3,300.

•Ageneraldistributionof thephysiciansshowsthatamajority of the graduates reside in the East as well as in the Piedmont area.

•TheBrodySchoolof Medicineisalsobecomingthe“health-care safety net” in eastern North Carolina; itprovidesmorethan$150millionperyearinuncompensated care.

•ECUisapioneerintheuseof moderntechnologytoimprove the quality of health services. Today, the ECU medical school is a leader in robotics and one of only a few sites training surgeons to use the da Vinci surgical system. Da Vinci allows doctors to perform robotic-assisted heart surgery without having to perform an open-heart operation. This procedure is internationally recognized as being innovative and revolutionary.

•Between2000–2009,morethan1,000doctorsandnurses in the United States and more than 80 physicians and other surgical teams from various countries—including Australia, Canada, Italy, Japan, Korea, Singapore, Taiwan, and Thailand—have received training at ECU in the use of the da Vinci system.

•TheCollegeof Nursingistheoldestprofessionalhealth-related academic program at ECU, dating back to1959.Today,thecollegeoffersbachelor’s,master’s,and doctoral degrees in various fields of nursing. During the last half-century, more than 6,000 students have graduated from the college.

•ECU’snursingprogramisknownforitsqualityandthe success of its graduates in improving the health

ECU MDs Residence by County

Total Number of ECU MDs

1–5

6–10

11–20

21–30

31–40

41+0

25

conditionsof theircommunities.About96percentof nursing graduates pass the state exam on their first attempt to become registered nurses.

•TheECUnursingprogrampreparesthelargestnumberof nurses in the state system. In terms of contributions to the region, in several of the counties in the East, more than half of the nurses working are ECU graduates, and a majority of these graduates work in the counties in eastern North Carolina.

Arts, Culture, and Entertainment

•ECUisvitaltotheregionfortheartisticandotherculturalservices that it offers as part of its public service programs.

•Manyof ECU’sprogramsinarts,music,anddanceplaya major role in providing world-class entertainment and inspiration to the region.

•In2009,theSchoolof Musicorganized34ticketedactivities in jazz, opera, and a variety of other music programsthatgeneratedmorethan$52,000.Italsoheldmore than 80 nonticketed activities related to concerts, music festivals, and childrens’ music programs.

Research and Creative Activity

ECU’s commitment to scholarly research and creative activity is based on the belief that a university should play a major role in creating and disseminating knowledge and information to address communities’ problems and creating new products, new businesses, and new jobs.

ECU’s research enterprise contributes to local economic vitality and problem solving related to medical sciences, physical sciences, business, and social sciences. It also gives students the opportunity to work with faculty on cutting-edge research, an experience that enhances students’ capacity to conduct research independently. Research at ECU is contributing significantly as illustrated below.

•In2009,ECUreceivedatotalof $48.7millioningrants and contracts from various federal, state, and private organizations to fund faculty and student research and creative activities.

•ECUspent$41millioninresearchin2009–2010,anincreaseof 44percentcomparedtofiguresin2004–2005.

•AsECUcontinuestopromoteresearchandscholarlyactivities, faculty output in the form of peer-reviewed publications, exhibits, performances, and other creative activities has shown an increasing trend. For instance, in twoyears(2007–2009),thenumberof peer-reviewedjournalarticleshasincreasedby25percent.

•ECU’sresearchenterprisehasbeenresponsibleforthedevelopment of products, including the SpeechEasy, an anti-stuttering device; the pulsatile pump (improves pulse flow in dialysis process); and the laser tweezers system (useful in diagnosis of cellular disorder).

•Fortheperiod2007–2009,ECUreported37newinventions, five new U.S. patents, and nine new U.S. patent applications filed.

Source: Cecil G. Sheps Center for Health Services Research, University of North Carolina at Chapel Hill.

Distribution of ECU Nursing Graduates Working in the State

Data include active, in-state RNs licensed in NC as of October 31, 2006, who obtained a bachelor of science in nursing (BSN) from ECU.

Percentage of nurses with bachelor’s degrees who graduated from ECU

(Number of counties)

No Active BSNs (17)1 to 4 percent (29)5 to 14 percent (20)15 to 49 percent (28)50 percent or more (6)

26

Conclusion

ECU has a long history of active participation in building the economy and cultural life of eastern North Carolina. Today, ECU’s success depends,

in many ways, on the continuing success of the East. As the region becomes prosperous and increasingly attractive, ECU becomes more competitive in attracting the finest faculty, students, and staff. This reciprocal relationship in turn enables ECU to contribute even more to the region. This partnership has strong roots and a promising future as ECU and the region look for new shared directions toward improving the economy and quality of life of the people of eastern North Carolina.

Great universities—like the communities and regions of which they are an integral part—are constantly changing. During the past decade, ECU has undergone a qualitative transformation. The key factors to this transformation have been the significant growth in enrollment; the development of the health-science programs (including the medical school and the various health-science programs); ECU’s decision, through its distance-education program, to open doors to those looking for alternative ways to enroll in classes; the development of

new and more specialized graduate programs (PhDs in microbiology and immunology, and coastal resources management; MS in biomedical science, software engineering, and security studies) to produce graduates who are prepared to work in emerging industries; and the adoption of a strategic plan focused on public service and regional transformation.

As ECU looks forward to the next century, its commitment to quality education and the desire to solidify its partnership with the East will continue. As a major recipient of state funding; an employer, purchaser of goods and services, and sponsor of major construction projects; a regional center for attracting quality students, faculty, and staff; and an institution with the potential to create specialized programs that can meet the demand for professionals with specialized skills; ECU will continue to sustain the strong link it shares with the East. More importantly, ECU takes its motto, Servire (To Serve), seriously and will continue to play a major role in solidifying its partnership and in building sustainable communities in the region.

27

1 There are two major methods that are often used to analyze university economic impact studies. The first group includes the direct method, also known as the American Council of Education (ACE) method. This method estimates impact based on detailed available data and information collected by surveying different groups such as students, faculty, and other employees. The second method is the indirect method, which includes the input/output model and the Ryan Shortcut model. Both methods use secondary data to estimate, in an indirect way, the impact upon local economy. The Ryan Model is a simplified version of the ACE model. It uses existing local, regional, and national resources instead of surveying students and employees. For more on the different methods, see Ruben Garrido-Yserte and Maria T. Gallo-Rivera, “The Impact of the University Upon Local Economy: Three Methods to Estimate Demand-Side Effects.” Annals of Regional Science,Vol.44,2010, pp.39–67.

2 RIMS II is a regional accounting model based on the national I/O table developed by the Bureau of Economic Analysis (BEA) of the US Department of Commerce. RIMS II has been used by a number of national agencies such as the Nuclear Regulatory Commission, the Department of Housing and Urban Development (HUD), and the Department of Defense (DOD). For more on RIMS II, see “Regional Economic Accounts” by BEA. www.bea.gov/regional/rims/brfdesc.cfm.

3 For a comparative analysis of the three models, see Lynch, Tim. “Analyzing the Economic Impact of Transportation Projects Using RIMS II, IMPLAN and REMI.” Institute for Social Science and Public Affairs, Florida State University, 2000.

4 The derivation of the multipliers was carried out by the BEA of the US Department of Commerce, December, 2010.

5 Caffrey, John and Isaacs, H. “Estimating the Impact of a College or a University on the Local Economy,” AmericanCouncilof Education,1971.

6 See “The Economic Impact of the University of Alabama (Birmingham),” November 2010. www.uab.edu/impact. McFarland suggests that if the impact study of a college or a university is restricted to local service area or local counties, a multiplier ranging from 1.8 to 2.2 would be appropriate. On the other hand, if the local area includes the entire state, as in the case of state-supported institutions, a multiplier ranging from 2.4to3.0isrecommended.SeeMacFarland,Thomas.“Guidelines on how to Prepare an Economic Impact Study of an American College or University using Integrated Postsecondary Education Data System,” 1999.www.nyx.net/~tmacfarl/eco_impa.ssi

Notes

28

Appendix

Model

This study is based on RIMS II, a regional input/output model, developed by the Bureau of Economic Analysis of the US Department

of Commerce. The model uses the national I/O as a benchmark and derives regional I/O multiplier tables. For the purpose of this study, regional I/O multipliers weregeneratedbyBEAforthe41easternNorthCarolinacounties. For more on the model, see www.bea.gov/regional/rims/index.cfm.

Methodology and Data Source

Annual economic impacts are grouped into two major categories:

Direct Impact

Direct impact represents the first-rounding of actual spending by the university operations, capital costs, and spending by students, faculty and staff, and visitors.

Data on university operations and capital costs were derived from the ECU Office of Administration and Finance. The spending by faculty and staff was based on payroll data.

The estimate on student spending was based on nontuition cost to attend ECU suggested by the Office of Financial Aid. The cost varies depending on whether the student lives on or off campus. A breakdown of the on-campus versus the off-campus students was provided by Campus Living and Student Affairs.

Indirect and Induced Impacts

These impacts represent the “multiplier” effects, and reflect the recirculation of direct spending throughout the economy.

The combination of the direct, indirect, and induced impacts equals to the total annual economic impact of ECU on the regional economy.

Data on visitors spending were derived based on an indirect method that took into account the number of

visitors per student and faculty. This method is commonly used in studies where survey data on student and faculty expenditures are not available. Figures on daily expenses by visitors were derived from estimates by the North Carolina Division of Tourism, Film, and Sports Development (NC-TFSD) and local hotel occupancy rates were based on a sample survey of local hotels conducted by the Greenville Convention and Visitors Bureau.

The information on visitors spending was further disaggregated into athletics and nonathletics event visitation spending to determine the impact of athletic and nonathletic activities. Athletics events visitation spending was estimated based on attendance for football and other sports (baseball, basketball, and softball) games as provided by the Athletics Office. In general, the attendance figures could be grouped into three categories—local (from around Pitt County), day trip (outside Pitt County, but within driving distance), andovernight(thosestayinginhotels).In2009,totalfootballattendanceforsixhomegameswas259,143,of which23percentwerestudents,22percentwerelocal,51percentweredaytrip,and4percentwereovernightstaying in hotels. Student athletics spending was excluded to avoid double counting with student expenditure. The spending by other groups (local day trip and overnight) was estimated based on rates from the NC-TFSD and the Greenville Convention Center and Visitors Bureau. Other sports visitation spending was also estimated based on attendance and daily expense rates. Similarly, nonathletic spending was derived based on the number of visitors per student. It is assumed that the sum of the athletic and nonathletic events spending equals total spending by visitors.

Data

The data include number of students by place of residence and nontuition expense rates, overnight visitors’ days, estimated daily expenses, athletic attendance, university revenue and expenditures, and multipliers based on RIMS II model for 2007 for eastern North Carolina.

29

Multipliers

RIMS II MuLtIPLIERS (2007)

Total Multipliers for Output and Employment by Industry in Eastern North Carolina (only for selected industries)

total Output Employment Industry (Dollars) (Jobs)

1. Crop and animal production 2.0367 12.5734

2. Forestry, fishing, and related activities 2.4722 23.1159

6. Utilities 1.4086 6.5849

7. Construction 1.9096 20.781

8. Wood product manufacturing 2.333 17.286

17. Furniture and related product manufacturing 1.882 15.4586

19. Food, beverage, and tobacco products 1.9121 9.5823

20. Textile and textile mill products 2.149 13.3661

22. Paper manufacturing 1.9099 10.2956

23. Printing and related support activities 1.7886 13.9076

27. Wholesale trade 1.593 11.7453

28. Retail trade 1.6600 21.3771

29. Air transportation 1.7405 16.1466

32. Truck transportation 1.8294 17.5823

33. Transit and ground passenger transportation 1.7997 24.8183

35. Other transportation and support activities 1.8219 19.8686

36. Warehousing and storage 1.8528 21.3218

37. Publishing industries, except Internet 1.6268 10.7412

40. Telecommunications 1.5563 7.9185

41. Internet and other information services 1.5891 10.3491

47. Rental and leasing services and lessors of intangible assets 1.653 14.4832

48. Professional, scientific, and technical services 1.7349 16.5728

50. Administrative and support services 1.7159 32.9362

52. Educational services 1.8717 24.301

54. Hospitals 1.8248 17.3982

55. Nursing and residential care facilities 1.8142 30.4327

56. Social assistance 1.7303 30.1185

57. Performing arts, spectator sports, museums, zoos, and parks 1.6663 22.7441

58. Amusements, gambling, and recreation 1.6875 27.7898

59. Accommodation 1.6298 21.4193

60. Food services and drinking places 1.7585 30.5453

61. Other services 1.7552 22.1177

62. Households 1.9859 9.9585

Note: Only selected industries are shown. Total sample includes 62 industries with Type I and Type II multipliers.

Source: Regional Input-Output Modeling System (RIMS II), Regional Product Division, Bureau of Economic Analysis

30

ECU Revenue and Expenditures

REVENuES 2009

Operating Revenues

Student Tuition and Fees, Net $125,070,005.03

Patient Services, Net $145,123,491.48

Federal Grants and Contracts $18,478,012.72

State and Local Grants and Contracts $10,989,163.47

Nongovernmental Grants and Contracts $11,454,253.04

Sales and Services, Net $86,465,603.88

Interest Earnings on Loans $477,401.93

Other Operating Revenues $1,874,049.62

TOTAL OPERATING REVENUES $399,931,981.17

ExPENSES

Operating Expenses

Salaries and Benefits $465,888,330.09

Supplies and Materials $71,346,643.53

Services $88,771,315.60

Scholarships and Fellowships $28,707,259.83

Utilities $21,003,284.52

Depreciation $19,257,752.99

TOTAL OPERATING ExPENSES $694,974,586.56

Operating Loss ($295,042,605.39)

NONOPERAtING REVENuES (ExPENSES)

State Appropriations $241,751,812.61

State Aid: Federal Recovery Funds $6,549,955.00

Noncapital Grants: Federal Student Financial Aid $18,356,353.31

Other Noncapital Grants $14,293,738.91

Noncapital Gifts $12,347,457.44

Investment Income (Net of Investment Expense) $2,437,654.85

Interest and Fees on Debt ($4,108,856.79)

Other Nonoperating Expenses ($2,694,152.84)

NET NONOPERATING REVENUES $288,933,962.49

Loss Before Other Revenues (Expenses) ($6,108,642.90)

State Capital Appropriations $39,259.86

Refund of Prior Years Capital Appropriations ($2,269,900.00)

Capital Grants $24,857,533.85

Capital Gifts $2,407,048.96

Increase in Net Assets $18,925,299.77

Source: ECU Administration and Finance

31

Number of Students by Place of Residence and Nontuition Cost of Attending ECU, 2009

Number of Annual Expense

UNDERGRADUATE Students Percent (Nontuition)

On-campus residents 4,988 23 $11,998

Off-campus residents 13,620 63 $11,136

Distance-education students 2,850 13 $13,370

Subtotal 21,458 100

GRADUATE

On-campus residents 20 0.3 $13,370

Off-campus residents 2,652 20 $13,370

Distance-education students 3,220 45 $13,370

Subtotal 5,892 100

MEDICAL SCHOOL 304 $20,570

TOTAL STUDENTS 27,654

Note: Expense figures for off-campus and graduate students are adjusted to reflect increase in trasport cost. All graduate students are assumed to be off-campus residents. For financial aid data of Main Campus as well as that of Brody School of Medicine, see ECU website of the respective offices.

Number of Visiting Days Based on Enrollment Data

Number of Overnight Visiting Visiting Days*

Undergraduate students 128,748

Graduate students 18,588

Faculty 7,128

TOTAL DAyS 154,464

*Based on visitors per student and per faculty

Daily Expense Rates for Visitors

type Expenditure per Visit

Transport $15.00

Lodging $116.00

Entertainment $25.00

Food/Beverages $34.00

Shopping $25.00

TOTAL $215.00

Based on NC-TGSD and Greenville Convention Center and Visitors Bureau data

Athletics Attendance

Sport Attendance

Football (6 home games) 259,143

Basketball, men (14 games) 52,500

Basketball, women (14 games) 27,090

Baseball 120,840

Softball 7,720

TOTAL 467,293

Source: ECU Athletics Office. See also www.ecupirates.com

East Carolina University is committed to the equality of educational opportunity and does not discriminate against applicants, students, or employees based on race, color, national origin, religion,

gender, age, creed, sexual orientation, or disability. An equal opportunity/affirmative action university, which accommodates the needs of individuals with disabilities.

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For more information, please contact the Officeof theChancellorat252-328-6105.