ETSU’s economic impact nearly doubles in decade to $620M
May 17, 2012 at 9:18 AM
The combination of student spending, employment opportunities and activities in the community offered by East Tennessee State University contributes close to $620 million to the regional economy, according to a study released Wednesday by the university’s Bureau of Business and Economic Research.
The study was done by Steb Hipple, a professor of economics at ETSU. It measured the economic impact of ETSU and the Medical Education Assistance Corp., the physician practice group for the James H. Quillen College of Medicine. The total for both reaches $683 million.
“We use a methodology developed by the U.S. Bureau of Economic Analysis,” Hipple said. “It looks at the regional economy on input and output, and traces the spending impact.”
The study measured ETSU in terms of production, number of full-time jobs created and the household earnings of the people who hold those jobs.
Washington County Mayor Dan Eldridge believes ETSU is extremely valuable to his county.
“ETSU is very significant to driving investment and it makes the community more desirable,” he said. “ETSU is one of two or three critical aspects, not only to Washington County, but to all of Northeast Tennessee.”
ETSU’s value was reflected in the study.
It showed that the impact on household income is $253 million. ETSU helped create 5,261 full-time jobs and the average pay of those jobs is $48,218.
The household income is the gross income that people would see on W2 tax forms. The $253 million is a part of the $683 million, Hipple said.
“ETSU has long been a key component of the local economy,” said Jeff Keeling, director of marketing and community relations for the Washington County Economic Development Council. “It helps provide stability and lessens our reliance on any one economic sector, be it manufacturing, tourism, services or otherwise. Its average wage is very good as well.”
Hipple conduced a similar study in 2001. That study did not include MEAC. The total economic impact ETSU had in 2001 was $328 million. His recent study shows an increase of approximately 90 percent.
“These dollar figures are not adjusted for inflation,” Hipple said. “The economic impact has doubled in 12 years and part of that is inflation.”
The study looked at the direct impact ETSU has on not only Washington County, but on eight counties in Northeast Tennessee, and nine counties in Southwest Virginia. It also measured the indirect impact.
“The direct impact is the actual budget for ETSU,” Hipple said. “The indirect is the services consumed by the people who work at the university. While the main campus is in Johnson City, there are branches throughout the region, so the impact is spread across a much larger area.”
Some of the counties included in the study were Hawkins, Sullivan, Washington and Greene. The real impact ETSU could have would be attracting business to the region, Keeling said.
“ETSU brings great potential for spin-off economic growth because of the intellectual capital it attracts to the area — or keeps here,” Keeling said. “The growing reputation of ETSU’s health sciences component holds great promise for economic growth in that economic sector, which tends to be stable and offer good-paying jobs.”
A reason ETSU has doubled its economic impact could be because of the university’s own growth.
ETSU’s enrollment in fall 2001 was 11,576, and enrollment in fall 2011 was 15,536. The growth of the student population has helped to increase the jobs created by 40 percent and household income has increased by more than 50 percent.
“Not all public universities grow quickly and improve their reputation — ETSU has done both,” Keeling said. “The growth over the past decade has benefited the overall economy, and the enhanced reputation has helped the Johnson City metro area continue to become a more attractive place to live, work, visit and retire to.”