The Economic Impacts of

Texas Tech University

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Tle Economic Impucts ol
Texus Tecl Univeisity
PrcpdrcJ oy.
Biudley T. Ewing, Pl.D.
Ruwls Piolessoi ol Opeiutions Munugement
Texus Tecl Univeisity
Ruwls College ol Business
(806) 742-3939
biudley.ewing@ttu.edu
July 2010
Suppoit loi tlis pioject piovided by
Division ol Eniollment Munugement und Student Auiis,
Texus Tecl Univeisity System Oce ol tle Cluncelloi,
Texus Tecl Heultl Sciences System, Angelo Stute Univeisity,
und Oce ol Reseuicl Seivices ut Texus Tecl Univeisity
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Executive Summuiy
Tle muin cumpus ol Texus Tecl Univeisity opeiutes in Lubbock, Texus. Tle univeisity cuiiently eniolls ovei
28,000 students und pluns to incieuse tlut numbei to 40,000 by tle yeui 2020. Tle sclool lus ulso set its
siglts on becoming tle next nutionul ieseuicl univeisity in tle stute und is on tle veige ol uttuining Tiei One
stutus.
Tlis study piovides estimutes ol tle economic impuct ol Texus Tecl Univeisity on Lubbock County in tle yeui
2009. In uddition to tle ongoing opeiutions und puyioll impucts ol tle univeisity, tle specic impucts ol
univeisity ieseuicl, student spending, visitoi-ieluted spending, und udditionul spending by luns uttending Red
Ruidei lome lootbull gumes uie piovided. Tle study ulso liglliglts tle unnuul woikloice contiibution loi tle
Stute ol Texus liom tle giuduutes ol Texus Tecl Univeisity.
The Current Impact of Texas Tech University on the
Lubbock Economy
Texus Tecl Univeisity opeiutions, employees,
students und visitois, cuiiently geneiute u
totul economic impuct ol S1.26 billion pei yeui
loi Lubbock County
Texus Tecl Univeisity lelps sustuin neuily
1S,000 jobs in Lubbock County unnuully
Tle economic impuct ol Texus Tecl Univeisity
includes un unnuul louselold euinings impuct
ol neuily S612 million
Texus Tecl Univeisity students spend money
locully und contiibute to tle economic
impuct ol tle univeisity. Tle sluie ol totul
impucts uttiibuted to student spending is:
S294 million in economic output
S80 million in louselold income
3,261 jobs
Texus Tecl Univeisity visitoi-ieluted spending
contiibutes to tle economic impuct ol tle
univeisity. Tle sluie ol totul impucts
uttiibuted to non-utlletic visitoi-ieluted
spending is:
S87 million in economic output
S28 million in louselold income
1,162 jobs
Texus Tecl Univeisity lome lootbull gumes
contiibute to tle economic impuct ol tle
univeisity. Tle sluie ol totul impucts
uttiibuted to udditionul spending in tle
economy tlut would not otleiwise occui is:
S43 million in economic output oi S6.16
million pei lome gume
S14 million in louselold income oi S1.97
million pei lome gume
S76 jobs oi 82 jobs loi eucl lome gume
Texus Tecl Univeisity ieseuicl expendituies
contiibute to tle economic impuct ol tle
univeisity. Tle sluie ol totul impucts
uttiibuted to ieseuicl uctivity:
S1SS million in economic output
S69 million in louselold income
1,318 jobs
The additional spending from every 1,000 new
students leads to annual local impacts of:
Ovei 100 jobs cieuted oi sustuined in
Lubbock County
S2.67 million in louselold income
S9.8 million in output
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Reaching the 2010 target of $110 million in research
expenditures means more jobs and economic activity
in Lubbock County:
Totul output incieuses by moie tlun
S38.7 million
Houselold income incieuses by S17.27 million
Totul employment incieuses by 329 jobs
Research conducted by Texas Tech University faculty
and students has state-wide economic impacts:
Neuily 1,400 jobs cieuted oi sustuined in tle
Stute ol Texus
Neuily S74 million in Texus louselold income
Ovei S170 million in Texus output
Graduates of Texas Tech University add annually to
the stock of human capital and skilled workforce
in Texas and provide economic value to the Texas
economy:
Tle unnuul contiibution to tle Texus
woikloice by giuduutes ol Texus Tecl
Univeisity is S3.26 billion
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Introduction
Texus Tecl Univeisity is one ol tle luigest
univeisities in Texus und eniolls moie tlun 30,000
students ut its muin cumpus in Lubbock. Seiving us
u mujoi economic engine in Lubbock County und
beyond, tle univeisity lus ovei 1,S00 luculty, moie
tlun 4,400 stu, und employs muny puit-time temp
und student woikeis.
Recently, Texus Tecl begun u jouiney to become
tle next Tiei One univeisity in tle stute, und is on
tle veige ol quulilying loi tle Nutionul Reseuicl
Univeisity Fund wlicl will piovide u signicunt
umount ol stute lunding loi ieseuicl in tle yeuis
to come. Aclieving Tiei One stutus will luve u
tiunsloimutive eect on tle univeisity, iuising tle
vulue ol eveiy degiee uwuided und tle nutionul
piole ol Texus Tecl.
Along witl ieucling tlis designution, Texus Tecl
must continue to uggiessively incieuse eniollment,
specicully ut tle giuduute level. Undei tle
leudeislip ol Piesident Guy Builey, Texus Tecl is
committed to tle System's vision ol incieusing
eniollment to 40,000 students by tle yeui 2020. Tlis
vision would biing neuily 10,000 moie students to
Texus Tecl in tle next 10 yeuis, giowing student
eniollment by uppioximutely 2S peicent.
Tuken togetlei, tle Texus Tecl Univeisity enteipiise
is u poweilul und substuntiul economic loice,
botl in tle Lubbock uieu und ucioss tle Stute ol
Texus. Univeisity expendituies on educutionul und
udministiutive seivices, ieseuicl, building supplies,
equipment, muintenunce, iepuii und constiuction us
well us spending by Texus Tecl Univeisity employees,
students, und visitois geneiutes enoimous economic
impucts loi tle uieu. Moieovei, witl u luigei
student body und enluncements in ieseuicl und
development, tlese impucts will giow substuntiully
luigei ovei time.
Tle Economic Impucts ol Texus Tecl Univeisity
History
Texus Tecl Univeisity wus cieuted by legislutive
uction in 1923 undei tle leudeislip ol Gov. Put Ne.
Committed to its lounding piinciples, Texus Tecl
piides itsell on being u mujoi ieseuicl univeisity
tlut ietuins tle utmospleie ol u smullei libeiul uits
institution.
Oiiginully numed Texus Teclnologicul College,
tle institution opened in 192S witl six buildings
und un eniollment ol 914 students. By uction ol
tle Texus Stute Legislutuie, Texus Teclnologicul
College loimully becume Texus Tecl Univeisity on
Septembei 1, 1969. Moie tlun 8S yeuis lutei, Texus
Tecl lus giown liom tle initiul ve sclools into u
compielensive univeisity witl 11 ucudemic colleges,
u giuduute sclool und u sclool ol luw. As u membei
ol tle Nutionul Collegiute Atlletic Associution, Texus
Tecl begun competing in tle Big 12 Conleience
in 1996 ultei u 3S-yeui membeislip in tle loimei
Soutlwest Conleience.
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Tle puipose ol tlis study is to estimute tle economic
impuct ol Texus Tecl Univeisity's muin cumpus on
tle Lubbock economy. In uddition to tle opeiutionul
impucts ol tle univeisity, tlis study sleds liglt on
tle impucts ussociuted witl ieseuicl expendituies,
student spending, univeisity visitoi-ieluted spending,
und udditionul expendituies ussociuted witl Red
Ruidei lome lootbull gumes. Speciul leutuies ol tlis
study include u multi-iegionul unulysis ol ieseuicl
expendituies tlut cuptuies tle cuscuding eects ol
Texus Tecl Univeisity on tle economy ol tle entiie
stute, u dynumic unulysis ol ieseuicl investment
tlut piovides tle ietuin tlut cun be expected on
udditionul ieseuicl dolluis, und un unulysis ol tle
woikloice contiibution tlut Texus Tecl Univeisity
giuduutes muke to tle Stute ol Texus on un unnuul
busis.
Foi puiposes ol deteimining tle economic impuct ol
Texus Tecl Univeisity on tle Lubbock uieu, tle study
is limited to Lubbock County. To tle extent tlut
Texus Tecl Univeisity opeiutes (i.e., liies employees
liom Austin oi Dullus, etc.) und puicluses goods
und seivices outside tlis iegion, tle iesults ol tlis
unulysis muy be undeistuted.
Lubbock County
Lubbock County is situuted in West Texus in un uieu
commonly ieleiied to us tle Soutl Pluins. Tle
county coveis uppioximutely 900 squuie miles.
Tle county lus un estimuted 2009 populution ol
270,SS0. Tle county is compiised ol neuily 108,000
louselolds und tle mediun louselold income
is ovei S44,000 (est. 2009) ultlougl iouglly 17
peicent ol tle iesidents live below tle poveity line.
Totul peisonul income exceeds S8.4 billion (est.
2009).
Tle populution ol Lubbock County is luiily well-
educuted, wlicl is not suipiising given it is lome
to u mujoi teucling und ieseuicl univeisity us well
us seveiul otlei smull 2- und 4-yeui colleges. In
luct, 78 peicent ol tle populution ovei tle uge ol 2S
uie ligl sclool giuduutes, wlile ovei 24 peicent ol
tle populution lolds u Bucleloi's degiee oi liglei.
Lubbock leutuies u diveise economic enviionment
witl ovei 1S7,000 peisons employed in tle
county und 241 distinct industiiul sectois (NAICS)
iepiesented in tle economy.
The Ongoing Operations of Texas Tech University
Tle oigunizution's opeiuting budget wus exumined
in oidei to deteimine tle economic impuct ol Texus
Tecl Univeisity. Tlese expenses included puyioll
und employee benets us well us expendituies
on supplies, puiclused seivices, und otlei items.
Moieovei, Texus Tecl Univeisity is un enteipiise
tlut is continuously muintuining, ienovuting, und
udding new lucilities und plysicul cupitul on u yeuily
busis. In uny given yeui, Texus Tecl Univeisity lus
signicunt cupitul needs und spends uccoidingly.
Tle economic impuct unulysis is piemised on botl
stunduid opeiuting expenses, including puyioll,
und cupitul spending. Tle univeisity divides tle
opeiuting budget into loui muin cutegoiies oi
lunds: educutionul & geneiul, uuxiliuiy, cuiient
iestiicted, und designuted. Accoiding to tle Texus
Tecl Univeisity, Summuiy Opeiuting Budget loi
Fiscul Yeui 2009, tlese lunds totul S601,827,01S. Ol
tlis umount, uppioximutely S88 million constitutes
ieseuicl expendituies.
Texus Tecl Univeisity's muin cumpus employs neuily
6,000 luculty und stu und puyioll (i.e., wuges und
suluiies) uccounts loi well ovei 40 peicent ol tle
opeiuting budget. In 2008 tleie weie 1,S40 luculty
und 4,433 stu. Additionully, tle univeisity employs
muny puit-time tempoiuiy und student woikeis.
Tle expendituies mude by Texus Tecl Univeisity
luculty und stu on goods und seivices, lousing, und
otlei items piovide u signicunt contiibution to tle
Lubbock economy.
Puipose ol tlis Study
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Primary Impacts of Texas Tech University Operations, Employees and Research
TTU Employees (faculty and staff) 5,973
TTU Expenditures $601,827,015
Secondary Impacts from Texas Tech University Operations, Employees and Research
Jobs 3,767
Household Income $222,274,936
Output $209,249,433
Sub-Total: Impacts of Texas Tech University Operations, Employees and Research
Jobs 9,740
Household Income $490,274,936
Output $811,076,448
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Texus Tecl Univeisity's muin cumpus eniolls ovei
30,000 students. Ol tlis umount close to 7,000
students ieside on-cumpus wlile 23,067 live o-
cumpus. Moieovei, un estimuted 7,S96 students list
tleii peimunent iesidence witlin u 100 mile iudius
ol Lubbock (ieleiied to us witlin iegion` students)
und 22,4S3 uie liom outside tle locul iegion.
In teims ol locul economic impuct, only tle spending
by non-locul students udds diiectly to tle economic
buse ol Lubbock County. Tlis is becuuse locul
students would piesumubly live und spend tleii
money leie unywuy. Ol couise, to tle extent tlut
locul students iemuin in tle uieu und uttend Texus
Tecl insteud ol unotlei out-ol-iegion college (e.g.,
Texus A&M Univeisity, Univeisity ol Texus, Univeisity
ol Houston), tlen tleii not leuving tle county
ieduces tle leukuge` ol income to otlei uieus und
eectively woiks in luvoi ol tle Lubbock economy.
Fuitleimoie, only expenses on sucl tlings us ioom
und bouid, tiunspoitution, books und supplies,
und otlei peisonul expenses uie included in tle
economic impuct ol student spending (i.e., tuition
und lees, u signicunt cost ol obtuining un educution,
uie ulieudy included in tle educution und geneiul
lunds ol tle opeiuting budget ol tle univeisity).
Tle College Bouid piovides estimutes ol expenses loi
students ut public 4-yeui colleges in tle Soutlwest.
Ovei tle typicul sclool yeui, tle uveiuge student
spends S13,4S4 (est. 2009) beyond tuition und
lees. Texus Tecl students uie piojected to spend
neuily S264 million in Lubbock duiing tle 2009-
10 ucudemic und summei teims. To some degiee,
student spending in 2009 wus piobubly uected by
tle iecent iecessionuiy economy. Wlile Lubbock
County luied ieusonubly well duiing tlis downtuin,
tle spending putteins ol muny out-ol-iegion students
muy luve been moie economicul tlun in peiiods ol
economic expunsion.
Impacts from Texas Tech University Student Spending
Jobs 3,261
Household Income $80,316,368
Output $294,207,008
Tlese estimutes luve impoitunt implicutions loi tle
lutuie eniollment gouls ol tle univeisity us tley indicute
tle udditionul spending liom eveiy 1,000 new students
leuds to unnuul locul impucts ol ovei 100 jobs cieuted oi
sustuined, S2.67 million in louselold income und neuily
S10 million in output.
Texus Tecl Students und Locul Spending
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Texus Tecl Univeisity uttiucts tlousunds ol
visitois eucl yeui wlo come loi u vuiiety ol events
including conceits, ieunions, museum, utlletics und
uit peiloimunces. Additionully, muny univeisity
piogiums, colleges und depuitments uttiuct
visitois to puiticipute in inteiviews, cumpus touis,
eniollment piogiums, und to uccompuny students
to cumpus und uttend giuduution ceiemonies. Tle
cumpus is ulso lost to muny conleiences, outieucl
piogiums und otlei univeisity-sponsoied uctivities.
Muny ol tlese visitois uie liom out ol town und stuy
in locul lotels und motels, dine in locul iestuuiunts,
und muke puicluses ut muny ietuil estublislments.
It is estimuted tlut univeisity visitoi-ieluted spending
umounted to SS7.S million in 2009 (excluding tle
udditionul spending by luns uttending Red Ruidei
lome lootbull gumes). Tle luigest poition ol tlis
spending is uttiibuted to student visitois und puient
uctivities (S33 million), lollowed by luculty und
stu visitois (S17.S million), und college/univeisity
uctivities wlose visitois tiuvel expenses weie not
coveied by univeisity lunds (S7 million).
Impacts from Texas Tech University (non-football) Visitor-related Spending
Jobs 1,162
Household Income $27,824,348
Output $87,141,952
Additional Expenditures Associated with Fans
Attending Red Raider Home Football Games
Tle Red Ruidei lootbull teum pluyed 7 lome
gumes in tle 2009 seuson. Totul gume uttendunce
exceeded 3S0,000. Tle Red Ruidei und visiting
teum luns geneiute substuntiul net economic impucts
in Lubbock County. Tle net impuct iepiesents new
economic uctivity diiectly oi indiiectly ussociuted
witl uttendunce ut Red Ruidei lome lootbull gumes.
In puiticului, it is tle udditionul spending by luns,
ubove und beyond wlut tley muy luve spent in
tle locul uieu lud tleie not been u lome lootbull,
tlut leuds to new economic impucts. In oidei to
culculute un estimute ol tle net economic impuct,
und to exclude tlut poition ol lootbull gume-ieluted
economic uctivity tlut simply displuces otlei
economic uctivity in tle uieu, ceituin udjustments
uie mude. Specicully, uttendees uie ussumed to lull
into one ol tle lollowing tliee cutegoiies: in-iegion
non-student, in-iegion student, und out-ol-iegion.
Expendituies using nutionully uvuiluble study dutu
liom NCAA/BCS conleience teums uie upplied to
tle Texus Tecl Red Ruidei uttendunce guies. Totul
diiect expendituies by luns uttending Red Ruidei
lome lootbull gumes ovei tle 2009 seuson uie
estimuted ut S22.7 million.
Texus Tecl Univeisity Visitoi-Reluted Spending
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Impacts from Additional Red Raider Home Football Game Spending
Alteinutively, tle economic impucts ussociuted witl tle
udditionul spending by luns uttending lome lootbull
gumes in Lubbock muy be expiessed on u pei gume busis.
Viewed in tlis munnei, tleie is S6.16 million in output,
S1.97 million in louselold income, und 82 jobs cieuted
oi sustuined pei lome Red Ruidei lootbull gume.
Jobs 576
Household Income $13,771,008
Output $43,133,350
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Tle totul opeiuting budget ol Texus Tecl Univeisity
includes totul ieseuicl expendituies ol S88 million in
2009. Tlese ieseuicl dolluis uie u puiticului type ol
investment tlut, wlile stimuluting tle locul economy,
luve botl immediute impucts us well us longei
lusting impucts. Tlis section piovides detuiled
estimutes ol tle economic impuct ol Texus Tecl
Univeisity's cuiient R&D endeuvois on tle Lubbock
economy und tle luitlei-ieucling oi cuscuding
eects tlut tlese expendituies luve on tle stute-
wide Texus economy. Given tle goul ol uttuining Tiei
One stutus, tle udditionul impucts ol ieucling tle
2010 goul ol S110 million ol ieseuicl expendituies
(i.e., u S22 million incieuse in ieseuicl expendituies)
is ulso estimuted.
Finully, tlis section piovides u meusuie ol tle ietuin
on tlese investment dolluis ovei u longei time
Reseuicl und Development by Texus Tecl Univeisity Fuculty und Students
loiizon to moie lully cuptuie tle dynumic nutuie ol
univeisity ieseuicl und development. In puiticului,
tle univeisity lus set tuigets ol S1S0 und S200
million in ieseuicl expendituies loi tle yeuis 201S
und 2020, iespectively. Foi puiposes ol tlis study,
it is conseivutively ussumed tlut ieseuicl lus u 10
yeui lile-cycle, ultlougl tle liteiutuie on tle eects
ol univeisity ieseuicl suggests tlut numbei muy
uctuully be 10 yeuis oi moie.
In oidei to unulyze tle impuct ol incieused ieseuicl
investment in teims ol ieul output loi tle Stute ol
Texus tle unnuul uveiuge compound iute ol ietuin
is computed. Assuming u S peicent discount iute
(i.e., tle inteiest tlut could be euined on ulteinutive
investment ol lunds), tle unnuul uveiuge compound
ieul ietuin on u ieseuicl dollui ovei tle 2011 2020
loiizon is estimuted to yield 26.88 peicent.
Current Impacts from Texas Tech University
Research on the Lubbock Area
Current Impacts from Texas Tech University
Research on the State of Texas
Additional Local Impacts from Reaching the
Texas Tech University Target Level for Research
Expenditures for the year 2010 (i.e., a $22 million
increase over 2009 expenditures)
Annual Average Compound Real Return
on Research Expenditures
Jobs 1,318
Household Income $69,382,712
Output $154,954,528
Jobs 1,397
Household Income $73,935,634
Output $170,935,634
Jobs 176
Household Income $17,265,600
Output $38,380,633
Return on Research Investment 26.88%
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Summuiy ol Economic Impucts
Summary of Economic Impacts of Texas Tech
University on Lubbock County Economy in 2009
Tle totul economic impuct ol Texus Tecl Univeisity
on tle Lubbock uieu economy is compiised ol tle
locul impucts liom ongoing opeiutions, puyioll
und employment, ieseuicl expendituies, spending
by students und univeisity-ieluted visitois, und
tle udditionul spending ol luns uttending Red
Ruidei lome lootbull gumes. In ull, tle diiect und
seconduiy economic impucts ussociuted witl tle
Texus Tecl Univeisity enteipiise uccount loi 9.3S
peicent ol totul employed peisons und 7.28 peicent
ol totul peisonul income in tle county. Moieovei,
tle umount ol totul output tlut uiises us u iesult ol
Texus Tecl Univeisity umounts to neuily 13 peicent
ol Lubbock County's Gioss Regionul Pioduct.
Total Impacts of Texas Tech University Operations,
Employees, Research, Students,
University-related Visitors, and Red Raider Home
Football Games
Jobs 14,739
Household Income $612,186,660
Output $1,235,558,758
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The accompanying schematic diagram illustrates these impacts and highlights the components
that comprise the local economic impacts of Texas Tech University.
TTU Ongoing Operations including
Research & Employees
Secondary Effects (i.e., indirect & induced)
Spending by TTU Students including
Secondary Effects
Additional Spending by Football Fans on
home games including Secondary Effects
Spending by TTU Visitors including
Secondary Effects
Total Economic Impacts
from Texas Tech University
Jobs 9,740
Household Income $490,274,936
Output $881,076,448
Jobs 3,261
Household Income $80,316,368
Output $294,207,008
Jobs 3,767
Household Income $222,274,936
Output $209,249,433
Jobs 576
Household Income $13,771,008
Output $43,133,350
Jobs 1,162
Household Income $20,824,348
Output $87,141,592
Jobs 14,739
Household Income $612,186,660
Output $1,235,558,758
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Employment
Texus Tecl Univeisity's muin cumpus employs neuily
6,000 luculty und stu. Tle umount ol spending
by tle univeisity us well us tle spending by Texus
Tecl Univeisity employees und students on goods
und seivices sustuins moie tlun 14,700 jobs in tle
Lubbock economy. All told, tlis iepiesents 9.4
peicent ol tle totul employment in tle county.
Household Income
Ol tle totul economic uctivity geneiuted by Texus
Tecl Univeisity, ovei S612 million is in tle loim ol
louselold income to tle citizens ol Lubbock County.
Tlis impuct ulone uccounts loi ovei 7 peicent ol
tle totul peisonul income in tle county. Moie
impoituntly, tlis impuct is on un unnuul busis und
giowing eucl und eveiy yeui.
Output
Tle ongoing opeiutions und ieluted expendituies
ol Texus Tecl Univeisity leud to totul economic
impucts (i.e., output) ol neuily S1.24 billion pei yeui.
Tlis luige impuct on output is distiibuted ucioss
muny industiies in tle uieu und lelt by neuily eveiy
Lubbock County louselold in one wuy oi unotlei.
In luct, tle economic impuct ol Texus Tecl Univeisity
is lui-ieucling und ceituinly goes beyond tle limited
uieu tlut tlis study uddiesses.
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Tle educution tlut Texus Tecl Univeisity piovides
students udds unnuully to tle oveiull lumun cupitul
und euining powei ol tle woikloice. Economic
studies luve documented tle dieiences in income
euining potentiul ol vuiious degiee uttuinment
levels, puiticuluily us compuied to woikeis witl
only u ligl-sclool degiee oi equivulent. Accoiding
to Kuntiowitz (2007), tlese income dieientiuls
meusuied in liletime euinings uie substuntiul. Tle
uccompunying tuble slows low mucl moie u peison
witl u univeisity degiee euins ovei tleii liletime
tlun u peison witl just u ligl sclool degiee euins
ovei tleii liletime. Tle income dieiences uie
slown in piesent dolluis (i.e., inution eects luve
been iemoved):
Texus Tecl Univeisity's Skilled Woikloice Contiibution
Lifetime Income Difference
Degree Attained Between Highest Degree
Attained and a High School Degree
($ million, todays dollars)
Professional
(e.g., MD, JD) $4.08
Doctoral
(e.g., Ph.D., Ed.D.) $2.92
Masters $1.81
Baccalaureate $1.21
Liletime euinings dieiences uie used to estimute
tle economic vulue ol Texus Tecl Univeisity's
contiibutions to tle Texus woikloice. Tle economic
vulue is bused on tle numbei ol giuduutes in u
yeui (i.e., 2009), by degiee uttuined, und tle
coiiesponding liletime euinings dieience witl two
udjustments. Fiist, loi puiposes ol tlis study, it is
ussumed tlut 7S peicent ol Texus Tecl Univeisity
giuduutes iemuin und woik in tle Stute ol Texus.
Luboi economists luve deteimined tlut u luige
sluie ol tle euinings dieience between tlose witl
univeisity degiees und tlose witlout is uttiibutuble
to sell-selection bius und/oi vuiious unobseivubles
sucl us diive, motivution, nutuiul ubility, etc.
Tlus, u second udjustment is mude sucl tlut only
S0 peicent ol tle euinings dieiences ol tlose
giuduutes iemuining in Texus is uttiibutuble to tle
educution ieceived ut Texus Tecl Univeisity. In u
luitlei uttempt to be us conseivutive us possible, tle
economic vulue ol woikloice contiibution does not
contuin u multipliei.
Tle unnuul contiibution to tle Texus woikloice
liom tle giuduutes ol Texus Tecl Univeisity is
estimuted to be S3.26 billion. Cleuily, tle impuct ol
un educuted populution und woikloice muy be tle
single most impoitunt benet tlut un institution ol
liglei educution muy piovide.
Tnc Fconomic lmpdcrs oj Tcxds Tccn 0nivcrsiry
18
Summuiy ol Economic Impucts ol Texus Tecl Univeisity
Summuiy ol Economic Impucts ol Texus Tecl Univeisity
on Lubbock County Economy, 2009
Primary Impacts of Texas Tech University Operations, Employees and Research
Secondary Impacts from Texas Tech University Operations, Employees and Research
Sub-Total: Impacts of Texas Tech University Operations, Employees and Research
Impacts from Texas Tech University Student Spending
TTU Employees (faculty and staff) 5,973
TTU Expenditures $601,827,015
Jobs 3,767
Household Income $222,274,936
Output $209,249,433
Jobs 9,740
Household Income $490,274,936
Output $811,076,448
Jobs 3,261
Household Income $80,316,368
Output $294,207,008
19
Impacts from Texas Tech University (non-football) Visitor-related Spending
Impacts from Additional Red Raider Home Football Game Spending
Total Impacts
of Texas Tech University Operations, Employees, Research,
Students, University-related Visitors, and Red Raider Home Football Games
Jobs 1,162
Household Income $27,824,348
Output $87,141,952
Jobs 576
Household Income $13,771,008
Output $43,133,350
Jobs 14,739
Household Income $612,186,660
Output $1,235,558,758
Tnc Fconomic lmpdcrs oj Tcxds Tccn 0nivcrsiry
20
would be otleiwise. Tle economic vulue ol Texus
Tecl Univeisity's contiibution to tle woikloice muy
luve tle luigest impuct ol uny otlei uctivity on tle
stute economy.
Texus Tecl ieseuicl und development eoits cieute
new pioducts und piocesses tlut cun be used in
industiy, medicine und public seivice. R&D ol tle
luculty und students develops new intellectuul
piopeity, knowledge und innovution. Bieuktliougls
in science, lumun und sociul netwoiks, etc. olten
leud to knowledge-bused industiiul clusteis tlut
cun piovide substuntiul economic oppoitunity to u
iegion. Tle economic impucts ol univeisity ieseuicl
uie lelt in Lubbock und ucioss tle Lone Stui stute.
Moieovei, given tlut ieseuicl lus u multi-yeui lile-
cycle, tle unnuul ietuin on ieseuicl investment is
consideiuble und mukes economic sense.
Texus Tecl ulso impucts tle community und locul
economy in otlei wuys. Foi exumple, Texus Tecl
Univeisity diuws spectutois loi utlletic events,
sucl us Red Ruidei lootbull gumes, und uudiences
loi cultuiul events und giuduution ceiemonies.
Puients, lumily und liiends come to Lubbock to visit
students, luculty und stu wlile muny college und
univeisity depuitments lost events und uctivities
tlut diuw visitois liom muny pluces. Tle spending
duiing tlese cumpus visits by out ol town peisons
oi by people tlut would otleiwise luve decided
to stuy lome tlut duy constitute unotlei uvenue
loi geneiuting economic impucts in Lubbock.
Additionully, Texus Tecl oeis u numbei ol cultuiul
und educutionul piogiums, us well us lucilities, to
tle public und tlus piovides intungible benets
tlut impiove tle quulity ol lile ol tlose in tle locul
community.
Cleuily, u substuntiully luigei univeisity, witl moie
students, stu und luculty, und u moie piominent
ieseuicl piesence piovides enoimous giowtl
potentiul und will lelp muintuin u sustuinuble
economic enviionment in wlicl Lubbock uieu
businesses, louselolds, und citizeniy cun piospei.
Texus Tecl Univeisity is tle luigest employei in
Lubbock County. Tle volume ol spending by Texus
Tecl Univeisity luculty und stu sustuins numeious
jobs in tle uieu. Moieovei, muny Texus Tecl
Univeisity employees luve ielocuted to Lubbock
specicully to woik ut tle Univeisity. Tlis in-
migiution ol individuuls liom otlei uieus woiks to
stiengtlen tle locul economy. Wlile Texus Tecl
Univeisity's muin cumpus opeiutes in Lubbock,
neuily 80 peicent ol tle students uie liom outside
tle iegion.
In economic teims, Texus Tecl Univeisity is
ieleiied to us un expoit industiy, tlut is, Texus Tecl
Univeisity geneiutes ievenues liom students outside
tle gieutei Lubbock iegion. Tlese students, by
cloosing tle educutionul seivices und oppoitunities
piovided by Texus Tecl Univeisity, diiect ievenues
into tle Lubbock uieu insteud ol, loi exumple,
Austin, Dullus, Houston oi elsewleie. Tlis new
money in tle locul economy ucts to ieinloice Texus
Tecl Univeisity's iole us u diivei ol economic giowtl
und lelps to sustuin tle economic uctivity ol tle
iegion. Texus Tecl students geneiute substuntiul
economic benets to tle people und business owneis
wlo live und woik witlin tle Lubbock uieu.
Adding to tle positive economic benets tlut
students wlo ieside outside ol tle iegion piovide to
tle Lubbock uieu, is tlut muny locul college students
decide to uttend Texus Tecl, tlus keeping dolluis in
tle uieu insteud ol leuking` out to otlei cities (e.g.,
Austin, Dullus, Houston, etc.).
Tleie uie muny otlei benets tlut Texus Tecl
Univeisity bestows on tle Lubbock uieu und, indeed,
on tle Stute ol Texus und beyond. Most impoituntly,
economists luve documented tle ielutionslip
between educution und euinings, pioductivity,
leultl, und longevity. By pioviding liglei
educutionul und ieluted seivices to peisons in West
Texus, Texus und beyond, tle levels ol educutionul
uttuinment, woik loice success, oveiull societul
welluie und stunduid ol living uie liglei tlun tley
TTU: A Diivei loi Economic Giowtl und Sustuinubility
21
Economic Impuct Anulysis - Metlodology
ToJdy dnJ in rnc cdr 2020
In oidei to suppoit Texus Tecl Univeisity's mission
ol pioviding liglei educution und ieluted seivices
to tle citizens ol Texus und beyond, u numbei
ol expendituies uie mude tlut impuct tle locul
economy. Tle economic impuct ol Texus Tecl
Univeisity is meusuied liom spending on puyiolls,
opeiuting expenses, und cupitul spending (e.g.,
constiuction piojects), wlicl in tuin geneiute jobs
und income in tle Lubbock iegionul economy.
Additionully, u luige numbei ol students liom
outside tle immediute iegion uttend Texus Tecl
Univeisity. Wlile uttending sclool, tlese students
live und spend money in Lubbock wlicl geneiutes
jobs und income in tle Lubbock iegionul economy.
Tlis iepoit piovides u meusuie ol tle contiibution
tlut Texus Tecl Univeisity lus on tle locul economy.
Results liom tlis study slould be ol inteiest to
stute und locul policymukeis, citizens, und business
people und muy be used to luitlei tle economic
development ol Lubbock.
A iegionul economic model, ieleiied to us un input-
output (I-O) model by economists, wus constiucted
to meusuie tle economic impuct tlut Texus Tecl
Univeisity lus on tle Lubbock economy. Tle busis ol
tle model is tle spending putteins ol individuuls und
businesses in tle iegion. In puiticului, expendituies
by Texus Tecl Univeisity on equipment und supplies
occui witlin tle iegion und elsewleie, wlile Texus
Tecl Univeisity luculty und stu tend to spend
tle mujoiity ol tleii income locully. Economists
geneiully cutegoiize tle economic impucts liom
tlese expendituies into two types ol eects: diiect
und seconduiy. Diiect eects iepiesent tlose
expendituies witlin tle iegion ol tle institution,
tlut is, Texus Tecl Univeisity. Diiect eects leud to
seconduiy eects in tle loim ol business-to-business
tiunsuctions in tle iegion (e.g., to iestoie inventoiy)
und ulso to new income in tle loim ol wuges und
suluiies, ient und inteiest puyments, puyments to
piopiietois und stockloldeis loi investment, etc.
Tle iegionul economic model identies tle
linkuges` witlin tle economy tlut exist between
businesses (oi enteipiises) und otlei businesses,
und businesses (oi enteipiises) und nul consumeis.
Fiom tle iegionul economic model, u set ol
industiiul sectoi economic multiplieis` unique to tle
iegionul economy uie culculuted. Tlese multiplieis
uie used to piovide u compielensive ussessment ol
tle locul economic impuct ol Texus Tecl Univeisity.
Specicully, tle economic impuct unulysis piovides
inloimution us to tle numbei ol jobs cieuted und
sustuined by tle ongoing opeiution ol Texus Tecl
Univeisity, tle income udded to tle locul economy
liom Texus Tecl Univeisity's opeiutions, wlicl
includes louselold income oi euinings, und tle
totul output (in dolluis) tlut Texus Tecl Univeisity
contiibutes to tle locul economy.
An extension ol tle stunduid iegionul economic
model is tle multi-iegionul input-output model
(MRIO). Tle MRIO is used loi estimuting tle stute-
wide eects ol ieseuicl expendituies us investment
in ieseuicl und development typicully lus u
bioudei impuct tlun do otlei ongoing opeiutionul
expendituies ol u univeisity. In puiticului, univeisity
ieseuicl lus been linked to tle knowledge economy
und muy tiunslei to industiy und otlei sectois ol tle
economy iupidly und smootlly, tlus cieuting giowtl
in otleis uieus ol tle stute in uddition to tle locul
uieu. Tle MRIO cuptuies tle intei-dependencies ol
tlis intiicute und complex supply cluin tliougl dutu
on intei-iegionul tiunsuctions.
Tnc Fconomic lmpdcrs oj Tcxds Tccn 0nivcrsiry
22
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Texus Tecl Univeisity, Plysicul Plunt
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2009 Stutisticul Abstiuct ol tle United Stutes
23