uws 2016 economic impact report pdf
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University of Western States Economic Impact Analysis
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Executive Summary
Introduction
University of Western States is a health sciences institution located in Northeast Portland.
Through its multiple educational programs and five integrated clinics, UWS provides substantial
economic and community impacts, as do their alumni.
This study built an input-output model to show the economic impacts. This was done by using
UWS operational/capital expenditure data, estimated student expenditures, and BEA RIMS II
multipliers to determine. Outside of the input-output model’s reporting of economic impacts,
clinical and alumni impacts were also calculated and reported to give a comprehensive analysis
of UWS’ total impact.
UWS FY 16 Economic Impact
Annual Total Gross Output $60,076,485
Total GDP (Value Added) $36,061,151
Total Jobs (Person Years) 792
Additional Findings
Ø UWS provides ~26,000 pro-bono visits annually.
Ø These visits and other patient discounts value $2,968,789.47 annually.
Ø Approximately 2,500 (or 51%) of UWS alumni live in Oregon or Washington.
Ø In line with national data, DC alumni (92.8% of UWS alumni) will earn $62,000 more
than individuals with bachelor’s degrees only and create $76,166 greater gross
economic output.
Ø Using federal marginal tax rates, DCs create $15,610 more federal tax revenue than
bachelor’s degree only holders.
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Project Overview University of Western States (UWS) is a regionally accredited institution of higher education
located in Northeast Portland. It provides multiple master’s and doctoral degree programs in the
health sciences and related fields, in addition to a massage therapy certification and bachelor’s
degree completion program, to its 930 students. The institution’s involvement also plays a
significant role in the health of thousands of individuals in the region through its five healthcare
clinics whose workload is more than 70% pro-bono.
Over the last decade, UWS has experienced tremendous growth and transformation. From
moving to university status, to adding new master’s and doctoral degree programs, to nearly
tripling student enrollment, to building new facilities—and more in the near future—UWS has
significantly grown its economic and community contributions. With this involvement, the
determination of UWS’ economic impact has become an increasingly relevant endeavor. The
objective of this study will be to adequately and systematically answer facilitate greater
understanding of how extensive UWS’ economic and community involvement is in the area.
This economic impact analysis will enumerate UWS’ economic impacts on the Portland-
Vancouver-Hillsboro region and the seven counties it includes. It will do so by analyzing current
institutional operational and capital expenditures, as well as student expenditures, and creating an
input-output model. This input-output model will be made using the Bureau of Economic
Analysis (BEA)’s RIMS II input-output multipliers for the region and using UWS’ 2016 Fiscal
Year (FY 16) expenditure data.
In addition to showing UWS’ economic impact, this study will include philanthropic impacts and
potential economic impacts of future projects that the university plans to undertake. While this
report also includes some UWS alumni data and statistics regarding the value of its degrees in
general, it should be noted that neither of these figures will be factored into the any of the
economic impacts shown by this study. The purpose of including this information in the report is
to demonstrate UWS’ linear trend of increasing economic involvement and growth, as well as
the far-reaching community impacts that a UWS education facilitates.
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This report will include a methodology overview, which will explain this study’s research
practices, the input-output model, and the BEA’s RIMS II data. A detailed methodology will
then be presented. Following, the report will present the findings of this study and answer the
question of UWS’ economic impact in the region by showing three figures: total gross output,
total GDP (value added), and total jobs (person years). Lastly, it will provide auxiliary figures
and information that are highly informative and important, but not included within the input-
output model.
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Methodology Overview Economic impact analyses attempt to quantify the economic effects that an organization or event
have on a given region. They typically factor in capital and organizational spending, revenue
changes, and all economic activity that is directly produced by an organization or event. After
collecting a comprehensive analysis of these data points, they will use a given system or
framework to determine the effects that this direct activity has on other industries and sectors of
the local economy.
Once these effects are determined, they are put into a more accessible format, typically including
gross output, GDP, and employment. By utilizing this format, individuals are able to see the
figures in a more conventional light, and also compare these impacts to other industries. As a
result, economic impact analyses tend to be used in a variety of industries, typically for the
purpose of objectively evaluating an organization’s or event’s significance and efficacy.
When evaluating UWS, direct institutional expenditures were relevant to determining economic
impacts. Because UWS offers programs that no institution in the region does, the study did not
have to factor the competitive aspect of economic losses that local institutions may experience.
However, just institutional spending did not entirely show the economic impact. UWS attracts
students from all over the nation and world and most students are not from the study’s region.
Due to this, student spending on room and board, entertainment, transportation, and
miscellaneous expenses comprise a vital component of the overall impact. By factoring student
economic activity—which is activity that would not occur without the institution—and the
institution’s operational and capital expenditures, the economic impact is able to be fully and
comprehensively factored.
Besides determining the scope of direct impacts, another initial point of order in the economic
analysis was to establish the study’s region. Because the university is located within Oregon, but
is just a few miles from the Washington border, it was very quickly established that parts of
Washington would need to be included to correctly calculate UWS’ impact. The region that was
used in the study is the Portland-Vancouver-Hillsboro area. This includes seven counties;
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namely, Clackamas, OR, Columbia, OR, Multnomah, OR, Washington, OR, Yamhill, OR, Clark,
WA, and Skamania, WA.
The next decision was to use an input-output model. Input-output models use regional or
Keynesian multipliers to estimate economy-wide changes as a result of direct spending. These
multipliers demonstrate indirect and induced impacts, which are then summed with direct
benefits to determine the full economic impact. Multipliers are divided into highly specific
industries and aggregates that measure commodities produced by industries and their respective
consumption. Multipliers are based off of many behavioral assumptions: marginal consumption
propensity, anticipated economic changes, supply, asset prices, and empirical interconnectedness
of industries.
Input-output models are highly efficient and an exceptional tool for estimating economy-wide
effects. Due to their specificity, input-output models are able to effectively isolate industries and
determine how much additional economic activity spawns from changes in that industry. For this
reason, input-output models tend to be used the vast majority of the time when conducting
economic impact analyses. For these reasons it was determined that the input-output model
would be the best fit for this particular study.
It should be noted, though, that input-output models have limitations—as do all models. Input-
output models tend to place too much emphasis on short-term effects—they are a “snapshot” of
the economy—and with that can underestimate the amount of time that changes take to occur.
Additionally, input-output models can rely too heavily on a linear demand-production curve,
with the model assuming that there is an equally proportional response in production to a change
in demand. Along with the linearity limitation, input-output models can tend to underestimate
supply constraints, which can slightly skew figures. However, despite some limitations within
input-output models, they tend to be the most accurate and precise estimation model.
For this economic study, the BEA’s RIMS II multipliers were used to develop the input-output
model. RIMS II multipliers are provided for 369 industries and 64 industry aggregates. They take
national input-output multipliers and modify them for a given region. RIMS II takes final
University of Western States Economic Impact Analysis
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demand charges, direct impacts, indirect impacts, and induced impacts and then sums them to
produce accurate economic impacts. It provides multipliers for four distinct categories: gross
output, value added, earnings, and employment.
Direct and indirect impacts are based on how goods/services are supplied and purchased in a
given region. Induced benefits are how employees spend earnings that are a result of direct and
indirect expenditures, e.g. household spending.
Direct + Indirect + Induced Impacts = Total Impacts
For UWS’ economic impact study, three of the RIMS II measures were used; namely, gross
output, value added, and employment. Gross earnings consist of intermediate earnings and value
added summed. Value added is the industry’s GDP, and is simply the net value of gross output
(gross output minus intermediate input). Employment is determined in person years. It is the
number of jobs that the institution directly provides added to the total jobs—both full and part-
time—created by the given economic activity.
Using the aforementioned methodology, UWS’ economic impact analysis was completed. Using
RIMS II multipliers for the specified region and for specified items of the budget, the
institution’s operational economic impact was determined. This was then added to the student
impacts. Student costs of living and estimated expenses are determined by UWS’ department of
financial aid. Total impacts were then figured using household multipliers. It ought to be noted
that these figures are highly conservative, due to the study’s inability to accurately determine the
expenses of students’ families living with them.
Regarding points of data that are included within this report but not factored into the economic
impact. Total discounted visits and the value of these visits is data that is kept by UWS’ clinics
and can be directly reported. The same is true of alumni geography. With respect to future
projects and economic activity, the cost of these investments and projects were self-reported
UWS and then the projected total impact was calculated using appropriate multipliers. The
University of Western States Economic Impact Analysis
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earnings difference estimates included in this report were collected from multiple nation-wide
earnings reports.
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Detailed Methodology Institutional Expenditures
Because this study calculated the impacts for FY 16, UWS’ operational and capital expenditures
were limited to FY 161. UWS’ expenditures totaled $21,543,137 in FY 16. However, $989,957
of these expenses—Depreciation, amortization, and accretion—were excluded for the purpose of
this study, as they provide no economic impact. Thus, the institutional expenditures that were
usable in calculating the economic impact summed to $20,553,1802.
The largest portion of the expenditures was salaries and benefits, comprising 66% of the
expenses by natural class. The three largest functional expenses were instruction, institutional
support, and clinics, comprising 36, 23, and 12% of the budget, respectively.
Figure 1.1, UWS budget breakdown
Using the detailed industry, Junior colleges, colleges, universities, and professional schools, as
well as breakdowns for each aggregate industry in the Portland-Vancouver-Hillsboro region, the
1July 1, 2015 to June 30, 2016 2Source: University of Western States
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gross output, value added, and employment were calculated. This calculation shows a gross
output of $44,037,243. It shows a value added (GDP) impact of $26,466,329. Lastly, it shows an
employment change in 654 jobs. This was calculated using a direct-effect multiplier for a more
precise calculation.
Student Expenditures
In addition to UWS’ expenditures, student expenditures were included in the study. However,
there are a few points of consideration for this calculation that ought to be noted.
• Of UWS’ 930 students, many are online. Any student in an online program was excluded
from the economic impact because they do not contribute an economic impact. Though
some students in the online programs do live in the region, they were not counted because
they did not actively come to the region for UWS—they just happened to live in it.
Therefore, UWS cannot claim their impact.
• Some students, especially in the massage therapy certification program, are from local
areas and/or live at home. Their impact was not counted. However, all students in the
post-graduate programs who physically attend UWS were counted in the economic
impact study.
• Tuition, fees, books, and supplies were excluded from the economic impact. Tuition and
fees were excluded because it is assumed they were accounted for in UWS’ operational
expenditures. Books and supplies were excluded because it is assumed books and
supplies are typically purchased online, and those purchased locally comprise a very
marginal impact.
• Only the students’ cost of living was included in the economic impact; the additional cost
of their spouses and children were excluded. There are two reasons for this.
o Reason one: this study is decidedly scientific and will only use data that can be
proven; the data pertaining to family members could not be garnered or estimated
reliably.
o Reason two: this study has taken a conservative approach to the economic impact.
Incorrect estimates could compromise the conservative nature.
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Based off of these criteria and considerations, as well as data collected and produced by the
office of financial aid, student spending was calculated to be $13,055,9563. The line-item
breakdown of indirect (non tuition and fees) costs is shown below.
Figure 1.2, UWS Student Expense Table
Using the household’s industry and each aggregate industry breakdown for the Portland-
Vancouver-Hillsboro region, then summing each aggregate together for the full household
impact, gross output, value added, and employment were calculated. These calculations show a
gross output of $16,039,241. They show a value added (GDP) value of $9,594,822. The
employment added is calculated to be 138 jobs.
3Source: University of Western States
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Overall Impact
UWS’ overall impact was calculated by summing the previously calculated impacts from prior
calculations.
Institutional Impacts + Student Impacts = Overall Impact
This resulted in the following:
Figure 1.3, Economic Impact Results Table
Impact Category Gross Output Value Added Employment
Institutional
Expenditures
$44,037,243 $26,466,329 654
Student Living
Expenditures
$16,039,241 $9,594,822 138
Total
Economic
Impacts
$60,076,485
$36,061,151
792
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Additional Impacts Not Included in Input-Output Model
This study is meant to be a comprehensive analysis of UWS. While the figures generated by the
input-output model show impressive results, they don’t fully portray the extent of UWS’
impacts.
UWS plays a vital role not just in the local economy, but in the overall health and wellness of the
community. They do this through a variety of avenues, such as their integrated clinics,
distinguished alumni, and projects where they utilize as many local businesses and industries as
possible. With a continued trend of increasing student enrollment, expanding programs, adding
infrastructure, and increasing clinical capacity and efficacy, UWS’ involvement and impacts
follow a positive linear trend.
Clinical Impact
UWS operates five clinics in Northern Oregon. These clinics are located in East Portland,
Gresham, downtown Portland, Salem, and an on-site Campus clinic. In total, they provided
32,820 visits in FY 16. Of those 32,280 visits, many of them were discounted and roughly
26,000 were pro-bono visits4. These visits, especially philanthropic visits, have a huge effect on
the local community. Because clinic expenditures were accounted for in the input-output model
and there isn’t a highly accurate method of evaluating philanthropic services within the model,
philanthropic services could not be included in impacts. However, the data is still there and they
are able to be quantified without multipliers.
The value of these clinic visits—including for-profit, pro-bono, and discounted-for-profit—
amounted to $3,826,890. The total value of the discounted visits summed to $2,968,789. This
equates to an average of $90.46 in discount (in value) per visit.5
4Source: University of Western States 5A main reason for such a high mean discount per visit is due to the high number of pro-bono visits where the entire visit is free.
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Figure 1.4, clinical visits summary
Total Visits (all clinics) 32,820
Total Discounts (value) $2,968,789
Average Discount (per visit) $90.46
By offering discounted and pro-bono services, UWS regularly makes healthcare accessible to
thousands of individuals who otherwise could not have afforded care. Additionally, it increases
discretionary income of families by giving them cheaper access to healthcare. The implications
of this are twofold. The increase in the availability of healthcare increases one’s likelihood of
seeking treatment and therefore, overall wellness. The increase in discretionary income increases
standard of living and consumption, thereby bolstering local industries.
Alumni Impact
According to a recent meta-analysis, UWS has 4,930 living, located alumni. Of these 4,930
alumni, 2,500 live in either Oregon or Washington. Of all of UWS’ alumni, 92.8% have been DC
graduates. As such, statistics regarding DC professionals were used to calculate and determine
the impacts of an average UWS graduate.
According to national data6, DCs, on average, earn $61,000 more annually than those with just
bachelor’s degrees. As a result, UWS has provided close to 4,000 surviving individuals with
approximately $60,000 higher earning potential than they otherwise would have had with just a
bachelor’s degree.
6See Appendix A
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Figure 1.5, earnings by degree
This is based upon the average DC earning $117,000 annually and bachelor’s degree holder
earning $55,0007. There are two main economic impacts that spawn from this increase in
income. The first is a larger disposable income, which facilitates more consumption and
economic activity. Using RIMS II household multipliers and breakdowns of industry aggregates,
this would mean that an average DC would have an impact of $143,734 gross output annually,
compared to a $67,568 gross output that someone with only a bachelor’s degree would have.
This would equal a difference of $76,166, meaning that each average DC has a $76,166 greater
gross output per year. Note that this figure is based entirely off of earnings and operates under
the assumption that both degree holders have perfectly average earnings.
The second impact that comes from this difference in income is the increase in tax revenues on a
national and state level. The state of Washington does not have a state income tax, so the
difference in state tax revenues, on a local level, is only applicable to Oregon. On a federal level,
assuming both degree holders filing as head of household, the difference in tax revenues would
7See Appendix A
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Bachelor'sDegree DCDegree
EarningsByDegree
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be $15,610 annually. On a state level, using Oregon as the example, the difference in tax
revenues would be $5,619 annually8.
Future Projects
As UWS’ programs and student enrollment expand, their structures are forced to expand. Within
the next three years, UWS plans to undertake a $3 million—conservatively—building project on
their 22-acre campus. Using RIMS II multipliers, this is projected to create an impact of
$6,329,400 gross output.
In the more recent future, UWS’ approved FY 17 expenditures are $1,111,214 higher than FY
16’s (excluding depreciation, amortization, and accretion in both budgets due to lack of
economic impact). As a result, UWS’ gross output is projected to be $2,380,887 higher than FY
16, showing a positive linear trend in economic impacts and involvement.
8See Appendix B
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Appendix A: Salary Methodology In order to compute estimated differences in earnings between individuals with only bachelor’s
degrees and individuals with DC degrees, an average figure for each category was pulled from
multiple sources.
Data on DC earnings was pulled from three sources. The reason for using three sources was to
eliminate bias, and also to account for limitations in each poll. Because many DCs are self-
employed, salaries and earnings often have statistically significant variation. Consequently, a
poll that only looks at the salary of DCs who are employees would not correctly show earnings
on its own. The sources used to determine DC earnings were as follows: Salary.com
(http://www1.salary.com/Chiropractor-Salaries.html), the Bureau of Labor Statistics
(http://www.bls.gov/ooh/healthcare/chiropractors.htm), Chiropractic Economics
(https://www.chiroeco.com/chiropractic-salary-expense-survey).
Each of these data points were given equal weight and were summed together, then divided by
three to determine the average. Salary.com determined the average annual earnings of DCs to be
$139,225. The Bureau of Labor Statistics9 and Chiropractic Economics reported $64,440 and
$147,334, respectively. This yielded an average of $116,999.67.
Data on bachelor’s degree holders’ earnings was pulled from two sources. First was the
Hamilton Project
(http://www.hamiltonproject.org/papers/major_decisions_what_graduates_earn_over_their_lifeti
mes/). Second was the Bureau of Labor Statistics (http://www.bls.gov/emp/ep_chart_001.htm).
The Hamilton project argues that the average lifetime earnings for bachelor’s degree holders,
factoring discounted earnings, is between $800,000 and $2,000,000 – depending on degree –
with an average of 1.19 million for all holders. It assumes a 40-year work life. This economic
impact study assumed the highest end, $2,000,000, which would average to $50,000 annually.
The Bureau of Labor Statistics shows that the average annually earnings are $59,124. The
average of the two is $54,562.
9Note: The Bureau of Labor Statistics only factors wages, not total earnings. Nonetheless, it was given equal weight, potentially deflating figures and certainly creating a conservative estimate.
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The difference of the degree holder’s average earnings was computed to be $62,437.67. Each
respective salary was used to determine economic impacts and tax revenues, as well as the
difference in economic impacts and tax revenues.
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Appendix B: Tax Methodology The total federal tax revenues and difference in tax revenues by degree’s earnings was calculated
using the IRS’ 2015 marginal tax rates (https://www.irs.com/articles/2015-federal-tax-rates-
personal-exemptions-and-standard-deductions), as well as the calculated earnings (See Appendix
A). The tax revenues for each degree’s earnings were found using the Head of Household table.
Therefore, the assumption was that each degree-holder would each be filing as the head of
household.
Figure 1.6, Head of Household Tax Rates
Using this table, the taxes paid, and therefore the tax revenue, for bachelor’s degree holders
would be $7,963. The taxes paid for a DC holder would be $23,572.50. The difference of the two
is determined to be $15,609.50.
State tax revenues were calculated for Oregon alone. Once again, they were determined using the
assumption that the degree holders would each be filing as the head of household. The tax rates
were found using the state of Oregon’s website, under income tax rates and tables
(https://www.oregon.gov/DOR/programs/individuals/Documents/full-year-income-tax-tables-
rates-101-043_2015.pdf).
Using this table, bachelor’s degree holder’s Oregon state income taxes would amount to
$4,440,58. DC holders would be $10,059.97. The difference of the two is $5,619.39.