MAILED: Dec. 16, 2005
EAU CLAIRE — The University of Wisconsin-Eau Claire’s regional economic impact totals more than $161 million annually, according to a recently completed analysis prepared by a university economist and a student researcher.
“This analysis shows that UW-Eau Claire is a tremendous economic asset to western Wisconsin,” Interim Chancellor Vicki Lord Larson said. “With more than 1,000 employees, the university is among the largest employers in the Chippewa Valley. And those employees — as well as our 10,000-plus students — spend a majority of their dollars in the area. Students also attract visitors, who spend money locally. And, when possible, the university tries to keep its purchases local to further contribute to the regional economy.”
On average, every dollar of UW-Eau Claire local spending generates about $1.41 in local business sales, said Dr. Wayne Carroll, the professor of economics who completed the analysis with Victoria Udalova, Eau Claire, a senior economics major.
“The bottom line of the analysis is that if UW-Eau Claire were to disappear tomorrow, local sales and spending in the Eau Claire economy would be about $161 million lower each year and the region would lose more than 3,000 jobs,” Carroll said.
The study also demonstrates that cuts to the UW-Eau Claire budget have a significant negative impact on the local economy, Carroll said.
“If the university’s annual budget is cut by just $1 million, it causes a reduction of nearly $1.1 million in local sales and it could lead to the loss of 20 jobs in the area,” Carroll said, adding that that’s an important finding given the significant cuts to the UW-Eau Claire budget in recent years.
When doing the analysis, researchers looked at four categories of spending: university purchases, employee spending, student spending and visitor spending. They determined an estimate of total spending in each of the four categories and an estimate of the amount of spending that takes place locally. They then factored in the “ripple effect,” or the impact that the spending has as the dollars circulate through the region, Carroll said.
“For example, if the university spends $1 on a construction project, it creates a local demand for construction materials and generates local income, most of which is spent locally,” Carroll said. “So the total impact of $1 of local spending is greater than $1.”
The analysis found that total UW-Eau Claire spending is about $152 million, of which an estimated $114 million is spent in the region, which is defined as Eau Claire, Chippewa and Dunn counties. When the impact that spending has on the local economy is factored in, the university’s total economic impact on the region increases to about $161 million, Carroll said.
Researchers determined that spending by faculty, staff and university retirees totals about $62 million a year, Carroll said, noting that more than 300 retired faculty and staff live in the Eau Claire area. The number also includes local health care spending by the faculty and staff, he said.
Students are estimated to have spent more than $59 million in the area last year, which created more than $81 million in local business activity, Carroll said. When studying student spending, researchers didn’t include expenses such as tuition and fees because that money doesn’t stay in the area, he said. But they did include room and board for students living off-campus, spending for books and supplies, personal spending and transportation costs, he said. The analysis also included the spending habits of students who stayed in Eau Claire for the summer.
Carroll said researchers estimated that students at UW-Eau Claire attract about 15,000 visits from family and friends each year. “Their spending has a significant impact on the local economy,” he said, noting that the analysis estimated visitors spent nearly $3.5 million in the region last year, which resulted in more than $5 million in local sales.
UW-Eau Claire purchases many supplies and services locally, which has an impact on the regional economy, Carroll said. The study estimated the university spent more than $27 million in goods and services last year, of which about $9 million was spent locally. The $9 million in local spending generated more than $14 million in sales in area businesses, he said.
The report also found that spending by UW-Eau Claire, its students, employees and visitors results in 2,752 jobs in the region, Carroll said. When the multiplier is considered, the university has an employment impact of 3,556 jobs, he said, noting the figure doesn’t include the number of university employees.
Student spending alone leads to the creation of more than 1,600 jobs, even before taking into account the multiplier effect, Carroll said. The number is large because most student spending is local and most of it is in the retail sector such as restaurants and stores, he said.
UW-Eau Claire also adds to the local economy in ways the study didn’t address, Carroll said. For example, the university attracts students from throughout Wisconsin and Minnesota, many of whom stay in the Chippewa Valley to work after graduation, he said. It also provides educational opportunities to people who live in the area, which may result in them earning more during their lifetimes, he said. While these kinds of factors clearly impact the local economy, they couldn’t be included in the study since the data needed to do an analysis doesn’t exist, he said.
“The university’s economic impact in western Wisconsin is impressive and important,” Larson said. “But it’s one of many meaningful ways that UW-Eau Claire adds value to this region. UW-Eau Claire is a regional center for music and the arts and for cultural and recreational activities, all of which help make the Chippewa Valley a more attractive place to live and work.”
