AN ECONOMIC ENGINE FOR

NORTH CENTRAL INDIANA

An Economic Impact Analysis
5 !"#!$"$ &"!'()*!+, -.-./. (0."./!0 !/1$0+

TABLE OF CONTENTS
EXECUTIVE REPORT ............................................................................................................... 3
ECONOMIC IMPACT OF INDIANA UNIVERSITY KOKOMO .................................................. 3
INTRODUCTION ............................................................................................................................ 3
INDIANA UNIVERSITY KOKOMO STUDY OVERVIEW .......................................................... 4
ECONOMIC IMPACT ...................................................................................................................... 6
EMPLOYMENT IMPACT .................................................................................................................. 7
GOVERNMENT REVENUE IMPACT .................................................................................................. 7
COMMUNITY BENEFITS ................................................................................................................. 7
APPENDIX A: ECONOMIC IMPACT OF INDIANA UNIVERSITY AND INDIANA
UNIVERSITY HEALTH .............................................................................................................. 9
APPENDIX B: DEFINITION OF TERMS ................................................................................. 10
APPENDIX C: IU KOKOMO PEER INSTITUTION COMPARISONS ..................................... 11
APPENDIX D: METHODOLOGY ............................................................................................ 12
APPENDIX E: FAQS REGARDING ECONOMIC IMPACT ASSESSMENT .......................... 14


!"#!$"$ &"!'()*!+, -.-./. (0."./!0 !/1$0+ 8

Executive Report
Economic Impact of Indiana University Kokomo
Introduction
1he mosL predomlnanL hlgher educaLlon
resource ln norLh CenLral lndlana, lndlana
unlverslLy kokomo (lu kokomo) enhances
Lhe llves of Lhe reglon's resldenLs Lhrough lLs
academlc programs, acLlvlLles and
organlzaLlons, and communlLy engagemenL.
lu kokomo ls commlLLed Lo reglonal
LransformaLlon of Lhe 14-counLy area lL
serves ln norLh CenLral lndlana. 8y provldlng
a common ground where educaLors,
members of Lhe buslness and lndusLrlal
communlLy and clLlzens can come LogeLher
Lo share resources and ldeas, lu kokomo
brlngs new energy Lo Lhe reglon's revlLallzaLlon efforLs.
lu kokomo ls a campus on Lhe move. lu kokomo's commlLmenL Lo bulldlng parLnershlps
LhroughouL norLh CenLral lndlana Lo sLrengLhen Lhe reglon ls a ma[or asseL. lu kokomo ls
worklng closer Lhan ever wlLh lvy 1ech and faclllLaLlng collaboraLlon among communlLles across
norLh CenLral lndlana. 1hls academlc year was lu kokomo's lnaugural year for sporLs ln Lhe
nAlA dlvlslon. lu kokomo ls experlenclng phenomenal lncreases ln enrollmenL, 13 new degree
programs have been lnLroduced Lo ensure LhaL Lhe unlverslLy sLays currenL and relevanL. lu
kokomo now offers 10 of lLs classes on lrlday and has added many onllne classes. lu kokomo
ls also experlmenLlng wlLh lnnovaLlve ways Lo enhance degree aLLalnmenL Lo ensure LhaL all of
Lhose enrolled sLudenLs compleLe Lhelr degree.







9 !"#!$"$ &"!'()*!+, -.-./. (0."./!0 !/1$0+

Indiana University Kokomo Study Overview

ln Aprll 2012, 1rlpp umbach was reLalned by
lndlana unlverslLy kokomo Lo measure Lhe
economlc, employmenL and governmenL
revenue lmpacLs of operaLlons and research of
all of lLs operaLlons ln Lhe SLaLe of lndlana as
well as Lhe norLh CenLral lndlana 8eglon. 1he
goals of lndlana unlverslLy kokomo's economlc
lmpacL sLudy lncluded Lhe followlng:
! 1o quanLlfy Lhe economlc and employmenL
lmpacLs of lu kokomo on Lhe sLaLe of lndlana and norLh CenLral lndlana 8eglon lncludlng:
Poward, 1lpLon, Cass, Mlaml, CllnLon, Carroll, Wabash, CranL, 1lppecanoe, lulLon and
PamllLon CounLles.
! 1o beLLer arLlculaLe Lhe beneflLs of a unlverslLy and lLs parLnershlp wlLh Lhe communlLy,
clLlzens and Lhe sLaLe.
Methodology Employed in the Economic Impact Study
1hls economlc lmpacL analysls measures Lhe effecL of
dlrecL and lndlrecL/lnduced buslness volume and
governmenL revenue lmpacLs for lu kokomo.

1he
meLhodology employed ln Lhe calculaLlon of Lhese lmpacLs
ls lMLAn.
1
uaLa lncluded: caplLal expendlLures,
operaLlonal expendlLures, [obs, payroll and beneflLs, and
Laxes. 1he approach Laken on Lhls sLudy was decldedly
conservaLlve. Powever, Lhe lmpacL flndlngs compare
favorably Lo lLs peer lnsLlLuLlons LhroughouL Lhe counLry,
as shown ln Appendlx C.
Lconomlc lmpacL beglns when an organlzaLlon spends
money. SLudles measurlng economlc lmpacL capLure Lhe
dlrecL economlc lmpacL of an organlzaLlon's spendlng,
plus addlLlonal lndlrecL and lnduced spendlng ln Lhe

1
MlnnesoLa lMLAn Croup, lnc. (MlC) ls Lhe corporaLlon LhaL ls responslble for Lhe producLlon of lMLAn (lMpacL
analysls for LAnnlng) daLa and sofLware. lMLAn ls a mlcro-compuLer-based, lnpuL-ouLpuL modellng sysLem. WlLh
lMLAn, one can esLlmaLe lnpuL-CuLpuL models of up Lo 328 secLors for any reglon conslsLlng of one or more
counLles. lMLAn lncludes procedures for generaLlng mulLlpllers and esLlmaLlng lmpacLs by applylng flnal demand
changes Lo Lhe model.
!:;<3:3 &:<=>?@<A4
(BC:CD<B *AE;4 .=>?=<>F
*AE;4 1>?<C;G llscal ?ear
2010 - 2011 (l? 10-11)
+H<@ *AE;4 !:B7E;>@G
lu kokomo
*AE;4 I>CJ?3KH4G SLaLe of
lndlana and norLh CenLral
lndlana 8eglon
/>AHC;C7CJ4G lMLAn
!"#!$"$ &"!'()*!+, -.-./. (0."./!0 !/1$0+ L

economy as a resulL of dlrecL spendlng. Lconomlc lmpacL has noLhlng Lo do wlLh dollars
collecLed by lnsLlLuLlons.
1oLal economlc lmpacL measures Lhe dollars LhaL are generaLed wlLhln lndlana due Lo Lhe
presence of lu kokomo. 1hls lncludes noL only spendlng on goods and servlces wlLh a varleLy of
vendors wlLhln Lhe sLaLe, and Lhe spendlng of lLs sLaff and vlslLors, buL also Lhe buslness volume
generaLed by buslnesses wlLhln lndlana LhaL beneflL from lu kokomo's spendlng. lL ls lmporLanL
Lo remember LhaL noL all dollars spenL by a unlverslLy remaln ln lLs home sLaLe. uollars LhaL
leak" ouL of Lhe sLaLe ln Lhe form of purchases from ouL-of-sLaLe vendors are noL lncluded ln
Lhe unlverslLy's economlc lmpacL on Lhe sLaLe. 1he mulLlpllers uLlllzed ln Lhls sLudy are derlved
from Lhe lMLAn sofLware. (See Appendlx u.)
key economlc lmpacL flndlngs presenLed wlLhln Lhe summary lnclude Lhe LoLal currenL (l? 10-
11) economlc, employmenL, and sLaLe and local governmenL revenue lmpacL of lu kokomo's
operaLlons.
->4 !& -CMCDC H<JH7<JHA@ <:B7E;>G

Cffers 70 undergraduaLe and graduaLe degree programs.
8achelor's degrees ln many arLs and sclences dlsclpllnes, lnformaLlcs, medlcal lmaglng
Lechnology, healLh sclences, crlmlnal [usLlce, nurslng, buslness, educaLlon and general
sLudles.
MasLer's degrees ln publlc managemenL, buslness, educaLlon, nurslng and llberal sLudles.
Comprlsed of Lhe followlng schools and dlvlslons (as of !uly 1, 2012): ulvlslon of Allled
PealLh Sclences, School of LducaLlon, School of Sclences, School of PumanlLles and
Soclal Sclences, School of 8uslness and School of nurslng.
Pome Lo urdue unlverslLy College of 1echnology aL kokomo, represenLlng a slgnlflcanL
parLnershlp for Lhe campus, Lhe communlLy and Lhe reglon slnce 1967.
Speclal programs lnclude an Ponors rogram, lnLernshlps, lu Seek and sLudenL
publlcaLlons, !"# %&''#()&*+#*, and -'&. ,"# /#00 1&2(#3
Lxpandlng capaclLles of 8achelor's and MasLer's degrees nurslng programs offered ln
kokomo Lo play a leadershlp role ln meeLlng a crlLlcal sLaLewlde healLhcare need.
Cffers numerous Cverseas SLudy opporLunlLles, lncludlng nurslng programs ln SouLh
korea and CenLral Amerlca and Lhe lnnovaLlon Symposlum ln CreaL 8rlLaln.
ALhleLlc Leams of Lhe lu kokomo Cougars began compeLlng as a member of Lhe nAlA ln
2011.
Cpenlng of a nurslng SlmulaLlon CenLer, a new Welcome CenLer, a SLudenL Success
CenLer, a nexL CeneraLlon Classroom and a ulglLal Medla cenLer. 8enovaLlon of Pavens
AudlLorlum and campus beauLlflcaLlon efforLs.

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Economic Impact
1he lmpacL of lu kokomo's operaLlons on Lhe norLh CenLral lndlana reglon ln 2011 was $41.7
mllllon ($20.1 mllllon dlrecL lmpacL and 21.6 mllllon lndlrecL/lnduced).
2
1he overall economlc
lmpacL of all lu kokomo's operaLlons on Lhe sLaLe of lndlana ln 2011 was OL5P2 D<77<C: ($23.1
mllllon dlrecL lmpacL and $27.0 mllllon lndlrecL/lnduced). (See llgure 1.)
1he dlrecL lmpacL sLems from Lhe ln-area spendlng of Lhe followlng prlnclpal groups:
expendlLures for caplLal lmprovemenLs, and goods and servlces, spendlng by sLaff, and Lhe
spendlng by ouL-of-area vlslLors. 1he lndlrecL and lnduced lmpacLs are derlved from Lhese dlrecL,
flrsL-round expendlLures, whlch are recelved as lncome by buslnesses and lndlvlduals ln Lhe
sLudy area and re-clrculaLed Lhrough Lhe economy ln successlve rounds of re-spendlng. lor
example, Company A produces books buL musL also purchase paper Lo prlnL Lhose books and so
Lhey conLracL wlLh Company 8 Lo provlde paper. Company A's spendlng would be Lhe dlrecL
lmpacL (Lhe money Lhey spend Lo operaLe) and Company 8's addlLlonal spendlng Lo shlp and
produce Lhe paper for Company A would be Lhe lndlrecL lmpacL. 1he lnlLlal round of Company
A's spendlng caused Company 8 Lo also spend money Lo provlde Lhls servlce Lo Company A.
(lor a full deflnlLlon of Lerms, see Appendlx 8.)



2
Lleven counLles ln Lhe norLh CenLral lndlana reglon lncludlng: Poward, 1lpLon, Cass, Mlaml, CllnLon, Carroll,
Wabash, CranL, 1lppecanoe, lulLon and PamllLon CounLles.
$20.1
million
$21.6
million
$41.7
million
$25.1
million
$27.0
million
$52.1
million
Direct Indirect/Induced Total
Figure 1: IU Kokomo Economic Impact (in millions)
Regional Impact State Impact
!"#!$"$ &"!'()*!+, -.-./. (0."./!0 !/1$0+ Q

Employment Impact
lu kokomo ls a sLaLewlde employer and provldes employmenL Lo a dlverse group of workers
who pay Laxes Lo sLaLe and local governmenLs. 1he economlc expanslon creaLed by 8C8SMA
brlngs abouL demand for addlLlonal employmenL ln Lhe sLaLe's economy. 1he company's
lmpacL on employmenL ls derlved from employees who work dlrecLly for lu kokomo and Lhe
LoLal number of employees who work for oLher buslnesses LhaL supply lu kokomo wlLh goods
and servlces.
1he LoLal employmenL lmpacL of lu kokomo's operaLlons ln Lhe reglon ls LR2 SCT@ (247 dlrecL
[obs and 234 lndlrecL/lnduced). 1he LoLal employmenL lmpacL of lu kokomo's operaLlons ln Lhe
sLaLe of lndlana ls N5N SCT@ (309 dlrecL [obs and 317 lndlrecL/lnduced) (see llgure 2).

Government Revenue Impact
lu kokomo's operaLlons ln Lhe sLaLe of lndlana generaLe O5PQ D<77<C: per year ln sLaLe and local
Lax revenue.
Community Benefits
lu kokomo has parLnered wlLh many organlzaLlons Lo provlde sLudenLs wlLh volunLeer
opporLunlLles. CrganlzaLlons lnclude: 1he Amerlcan Cancer SocleLy, 8rldges CuLreach, 1he
Carver CenLer unlLed Way and lamlly Servlce AssoclaLlon, [usL Lo name a few. lu kokomo
belleves ln geLLlng sLudenLs lnvolved, glvlng back and maklng an lmpacL on Lhe communlLy.
247
jobs
254
jobs
501
jobs
309
jobs
317
jobs
626
jobs
Direct Indirect/Induced Total
Figure 2: IU Kokomo Employment Impact (in jobs)
Regional Impact Statewide Impact
U !"#!$"$ &"!'()*!+, -.-./. (0."./!0 !/1$0+

1rlpp umbach esLlmaLes LhaL lu kokomo, faculLy, sLaff and sLudenLs generaLe more Lhan O8P9
D<77<C: annually ln charlLable donaLlons and volunLeer servlces. 1hese beneflLs (ln addlLlon Lo
Lhe $32.1 mllllon annual lmpacL on Lhe sLaLe of lndlana) lnclude $733,981 donaLed Lo local
charlLable organlzaLlons by lu kokomo faculLy, sLaff and sLudenLs and nearly $2.6 mllllon ln
value of volunLeer Llme provlded Lo area communlLles by lu kokomo.

!"#!$"$ &"!'()*!+, -.-./. (0."./!0 !/1$0+ V

$KK>:;<W $G (BC:CD<B !DK3BA CX !:;<3:3 &:<=>?@<A4 3:; !:;<3:3
&:<=>?@<A4 Y>37AH
lor nearly 200 years, lndlana unlverslLy has dellvered broad access Lo undergraduaLe, graduaLe
and conLlnulng educaLlon for sLudenLs LhroughouL lndlana, Lhe unlLed SLaLes and Lhe world, as
well as ouLsLandlng academlc and culLural programs and sLudenL servlces. 1hough lLs prlmary
mlsslons are educaLlon, research and communlLy servlce, an lnsLlLuLlon as vasL as lu ls also
cenLral Lo Lhe flscal healLh and well-belng of Lhe sLaLe of lndlana. lndlana unlverslLy's dally
operaLlons provlde ongolng flnanclal beneflLs Lo Lhe sLaLe's economy. 1he unlverslLy
slgnlflcanLly lmpacLs Lhe sLaLewlde economy Lhrough expendlLures, governmenL revenues, and
Lhe employmenL and personal lncome of resldenLs. 8eyond Lhese flnanclal beneflLs, lu ls
preparlng Lhe workforce of Lhe fuLure and creaLlng a sLronger lndlana.
1he resulLs presenLed ln lndlana unlverslLy's economlc lmpacL sLudy are generaLed on an
3::E37 basls. 1he economlc lmpacL ln fuLure years can elLher be hlgher or lower, based on Lhe
number of sLudenLs, caplLal
expanslon, lncreases ln exLernal
research and Lhe level of sLaLe
approprlaLlons. lL ls lmporLanL Lo
noLe LhaL Lhe economlc and
employmenL lmpacLs sLaLed ln Lhls
reporL represenL Lhe fresh dollar"
lmpacL of lu and lu PealLh. Annually,
Lhe lmpacL of all lu and lu PealLh
CperaLlons represenL an lmpacL of
O22PL T<77<C:, 2RRZR82 SCT@ and
OL22PQ D<77<C: ln sLaLe and local Lax
revenue.






2R !"#!$"$ &"!'()*!+, -.-./. (0."./!0 !/1$0+

Appendix B: Definition of Terms

Study Year llscal ?ear 2010-2011 (l? 10-11)
Total Economic
Impact

1he LoLal economlc lmpacL of an lnsLlLuLlon lncludes boLh Lhe dlrecL
lmpacL and Lhe lndlrecL lmpacL generaLed ln Lhe economy as a
resulL of Lhe lnsLlLuLlon.
Direct Economic
Impact
ulrecL lmpacL lncludes lLems such as lnsLlLuLlonal spendlng,
employee spendlng and spendlng by vlslLors Lo Lhe lnsLlLuLlon.
Indirect Economic
Impact
lndlrecL lmpacL, also known as Lhe mulLlpller effecL, lncludes Lhe re-
spendlng of dollars wlLhln Lhe local economy by vendors/suppllers
and households.
Multiplier Effect
1he mulLlpller effecL ls Lhe addlLlonal economlc lmpacL creaLed as a
resulL of Lhe lnsLlLuLlon's dlrecL economlc lmpacL. Local companles
LhaL provlde goods and servlces Lo an lnsLlLuLlon lncrease Lhelr
purchaslng by creaLlng a mulLlpller.
Direct Tax
Payments
ulrecL Lax paymenLs made by an lnsLlLuLlon Lo a unlL of
governmenL.
Indirect Tax
Payments
CovernmenL revenue LhaL ls collecLed by governmenLal unlLs ln
addlLlon Lo Lhose pald dlrecLly by an lnsLlLuLlon, lncludlng Laxes
pald dlrecLly by employees of Lhe lnsLlLuLlon, vlslLors Lo Lhe
lnsLlLuLlon and vendors who sell producLs Lo Lhe lnsLlLuLlon.
Direct
Employment
1oLal employees based on LoLal [obs.
Indirect
Employment
lndlrecL employmenL ls Lhe addlLlonal [obs creaLed as a resulL of
Lhe lnsLlLuLlon's economlc lmpacL. Local companles LhaL provlde
goods and servlces Lo an lnsLlLuLlon lncrease Lhelr number of
employees as purchaslng lncreases, Lhus creaLlng an employmenL
mulLlpller.





!"#!$"$ &"!'()*!+, -.-./. (0."./!0 !/1$0+ 22

Appendix C: IU Kokomo Peer Institution Comparisons

!:;<3:3 &:<=>?@<A4 -CMCDC 1>>? &:<=>?@<A4 0CDK3?<@C:@
1>>? &:<=>?@<A4
*A3A>
$KK?CK?<3A<C:
(BC:CD<B
!DK3BA[
(DK7C4D>:A
!DK3BA
!:;<3:3 &:<=>?@<A4 -CMCDC
$10.8 M
(l? 08-09)
$32.1 M
(2010, lMLAn)
626 [obs
\7E>X<>7; *A3A> 0C77>J>
$6.3 M
(l? 07-08)
$96.3 M
(2008, lMLAn)
320 [obs
/<:CA *A3A> &:<=>?@<A4
$48.3 M
(l? 08-09)
$143.3 M 1,362 [obs
&:<=>?@<A4 CX +>W3@ CX AH>
1>?D<3: \3@<:
$13.6 M
(l? 03-04)
$71.9 M
(2004, lMLAn)
1,331 [obs
&:<=>?@<A4 CX $73@M3 *CEAH>3@A
$26.8 M
(l? 09-10)
$61.3 M
(2009, lMLAn)
343 [obs
["CA>G +H> D>AHC;C7CJ<>@ EA<7<]>; AC BCDK7>A> AH> >BC:CD<B <DK3BA @AE;<>@ T4 AH> K>>?
E:<=>?@<A<>@ <: AH> A3T7> =3?4 T4 >:A<A4P +?<KK &DT3BH F3@ :CA AH> ?>@>3?BH>? XC? 377
@AE;<>@P


25 !"#!$"$ &"!'()*!+, -.-./. (0."./!0 !/1$0+

Appendix D: Methodology

IMPACT ON STATE BUSINESS VOLUME AND GOVERNMENT REVENUE
1he unlverslLy ls a ma[or employer ln Lhe sLaLe and, as such, a ma[or generaLor of personal
lncome for sLaLe resldenLs. 8uslnesses operaLlng wlLhln lndlana ln Lhe wholesale, reLall, servlce
and manufacLurlng secLors beneflL from Lhe dlrecL expendlLures of Lhe lnsLlLuLlons and Lhelr
faculLy, sLaff, sLudenLs and vlslLors on goods and servlces. AddlLlonally, many of Lhese dlrecL"
expendlLures are re-clrculaLed ln Lhe economy as reclplenLs of Lhe flrsL-round of lncome re-
spend a porLlon of Lhls lncome wlLh oLher buslnesses and lndlvlduals wlLhln lndlana.

METHODOLOGY AND DATA UTILIZED FOR THE ESTIMATION OF THE ECONOMIC
IMPACT OF INDIANA UNIVERSITY KOKOMO
1he economlc lmpacL of lndlana unlverslLy kokomo was esLlmaLed uslng lMLAn (lMpacL
Analysls for LAnlng), an economeLrlc modellng sysLem developed by applled economlsLs aL
Lhe unlverslLy of MlnnesoLa and Lhe u.S. loresL Servlce. 1he lMLAn modellng sysLem has been
ln use slnce 1979 and ls currenLly used by over 300 prlvaLe consulLlng flrms, unlverslLy research
cenLers and governmenL agencles. 1he lMLAn modellng sysLem comblnes Lhe u.S. 8ureau of
Lconomlc Analysls' lnpuL-CuLpuL 8enchmarks wlLh oLher daLa Lo consLrucL quanLlLaLlve models
of Lrade flow relaLlonshlps beLween buslnesses and beLween buslnesses and flnal consumers.
lrom Lhls daLa, one can examlne Lhe effecLs of a change ln one or several economlc acLlvlLles Lo
predlcL lLs effecL on a speclflc sLaLe, reglonal or local economy (lmpacL analysls). 1he lMLAn
lnpuL-ouLpuL accounLs capLure all moneLary markeL LransacLlons for consumpLlon ln a glven
Llme perlod. 1he lMLAn lnpuL-ouLpuL accounLs are based on lndusLry survey daLa collecLed
perlodlcally by Lhe u.S. 8ureau of Lconomlc Analysls and follow a balanced accounL formaL
recommended by Lhe unlLed naLlons.
lMLAn's 8eglonal Lconomlc AccounLs and Lhe Soclal AccounLlng MaLrlces were used Lo
consLrucL sLaLe-level mulLlpllers, whlch descrlbe Lhe response of Lhe sLaLe economy Lo a change
ln demand or producLlon as a resulL of Lhe acLlvlLles and expendlLures of Lhe lndlana unlverslLy
sysLem. Lach lndusLry LhaL produces goods or servlces generaLes demand for oLher goods and
servlces, and Lhls demand ls mulLlplled Lhrough a parLlcular economy unLll lL dlsslpaLes Lhrough
leakage" Lo economles ouLslde Lhe speclfled area. lMLAn models dlscern and calculaLe
leakage from local, reglonal and sLaLe economlc areas based on workforce conflguraLlon, Lhe
lnpuLs requlred by speclflc Lypes of buslnesses, and Lhe avallablllLy of boLh lnpuLs ln Lhe
economlc area. ConsequenLly, economlc lmpacLs LhaL accrue Lo oLher reglons or sLaLes as a
consequence of a change ln demand are noL counLed as lmpacLs wlLhln Lhe economlc area. 1he
!"#!$"$ &"!'()*!+, -.-./. (0."./!0 !/1$0+ 28

model accounLs for subsLlLuLlon and dlsplacemenL effecLs by deflaLlng lndusLry-speclflc
mulLlpllers Lo levels well below Lhose recommended by Lhe u.S. 8ureau of Lconomlc Analysls.
ln addlLlon, mulLlpllers are applled only Lo personal dlsposable lncome Lo obLaln a more reallsLlc
esLlmaLe of Lhe mulLlpller effecLs from lncreased demand. lmporLanLly, lMLAn's 8eglonal
Lconomlc AccounLs exclude lmporLs Lo an economlc area, so Lhe calculaLlon of economlc
lmpacLs ldenLlfles only Lhose lmpacLs speclflc Lo Lhe economlc lmpacL area, ln Lhls case Lhe
SLaLe of lndlana. lMLAn calculaLes Lhls dlsLlncLlon by applylng 8eglonal urchase CoefflclenLs
(8C) Lo predlcL reglonal purchases based on an economlc area's parLlcular characLerlsLlcs. 1he
8eglonal urchase CoefflclenL represenLs Lhe proporLlon of goods and servlces LhaL wlll be
purchased reglonally under normal clrcumsLances, based on Lhe area's economlc characLerlsLlcs
descrlbed ln Lerms of acLual Lrade flows wlLhln Lhe area.
MODEL INPUTS AND DATA SOURCES
Model lnpuLs lncluded acLual l? 10-11 expendlLures provlded by lu for lu kokomo.

29 !"#!$"$ &"!'()*!+, -.-./. (0."./!0 !/1$0+

$KK>:;<W (G 6$^_@ )>J3?;<:J (BC:CD<B !DK3BA $@@>@@D>:A

What is economic impact?
Lconomlc lmpacL beglns when an organlzaLlon spends money. Lconomlc lmpacL sLudles
measure Lhe dlrecL economlc lmpacL of an organlzaLlon's spendlng, plus addlLlonal lndlrecL
spendlng ln Lhe economy as a resulL of dlrecL spendlng. Lconomlc lmpacL has noLhlng Lo do wlLh
dollars collecLed by lnsLlLuLlons, Lhelr proflLablllLy or even Lhelr susLalnablllLy, slnce all operaLlng
organlzaLlons have a poslLlve economlc lmpacL when Lhey spend money and aLLracL spendlng
from ouLslde sources.
ulrecL economlc lmpacL measures Lhe dollars LhaL are generaLed wlLhln Lhe SLaLe of lndlana due
Lo Lhe presence of lndlana unlverslLy kokomo. 1hls lncludes noL only spendlng on goods and
servlces wlLh a varleLy of vendors wlLhln Lhe sLaLe, and Lhe spendlng of lLs employees and
vlslLors, buL also Lhe buslness volume generaLed by buslnesses wlLhln lndlana LhaL beneflL from
lndlana unlverslLy kokomo's spendlng. lL ls lmporLanL Lo remember LhaL noL all dollars spenL by
lndlana unlverslLy kokomo sLay ln lndlana. uollars LhaL leak" ouL of Lhe sLaLe ln Lhe form of
purchases from ouL-of-sLaLe vendors are noL lncluded ln lndlana unlverslLy kokomo's economlc
lmpacL on Lhe sLaLe.
1he LoLal economlc lmpacL lncludes Lhe mulLlpller" of spendlng from companles LhaL do
buslness wlLh lndlana unlverslLy kokomo. SupporL buslnesses may lnclude lodglng
esLabllshmenLs, resLauranLs, consLrucLlon flrms, vendors, Lemporary agencles, eLc. Spendlng
mulLlpllers aLLempL Lo esLlmaLe Lhe rlpple effecL ln Lhe sLaLe economy where Lhe spendlng
occurs. lor example: Spendlng by anoLher lu campus wlLh local vendors provldes Lhese vendors
wlLh addlLlonal dollars LhaL Lhey re-spend ln Lhe local economy, causlng a mulLlpller effecL."
What is the multiplier effect?
MulLlpllers are a numerlc way of descrlblng Lhe secondary lmpacLs sLemmlng from Lhe
operaLlons of an organlzaLlon. lor example, an employmenL mulLlpller of 1.8 would suggesL
LhaL for every 10 employees hlred ln Lhe glven lndusLry, elghL addlLlonal [obs would be creaLed
ln oLher lndusLrles, such LhaL 18 LoLal [obs would be added Lo Lhe glven economlc reglon. 1he
mulLlpllers used ln Lhls sLudy range from 1.8 Lo 2.0.
1he MulLlpller Model ls derlved maLhemaLlcally uslng Lhe lnpuL-ouLpuL model and Soclal
AccounLlng formaLs. 1he Soclal AccounLlng SysLem provldes Lhe framework for Lhe predlcLlve
MulLlpller Model used ln economlc lmpacL sLudles. urchases for flnal use drlve Lhe model.
lndusLrles LhaL produce goods and servlces for consumer consumpLlon musL purchase producLs,
raw maLerlals and servlces from oLher companles Lo creaLe Lhelr producL. 1hese vendors musL
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also procure goods and servlces. 1hls cycle conLlnues unLll all Lhe money ls leaked from Lhe
reglon's economy. 1here are Lhree Lypes of effecLs measured wlLh a mulLlpller: Lhe dlrecL, Lhe
lndlrecL and Lhe lnduced effecLs. 1he dlrecL effecL ls Lhe known or predlcLed change ln Lhe local
economy LhaL ls Lo be sLudled. 1he lndlrecL effecL ls Lhe buslness-Lo-buslness LransacLlons
requlred Lo saLlsfy Lhe dlrecL effecL. llnally, Lhe lnduced effecL ls derlved from local spendlng on
goods and servlces by people worklng Lo saLlsfy Lhe dlrecL and lndlrecL effecLs.
#<?>BA >XX>BA@ Lake place only ln Lhe lndusLry lmmedlaLely belng sLudled.
!:;<?>BA >XX>BA@ concern lnLer-lndusLry LransacLlons: because lu kokomo ls ln buslness,
Lhey have a demand for locally produced maLerlals needed Lo operaLe.
!:;EB>; >XX>BA@ measure Lhe effecLs of Lhe changes ln household lncome: employees of
lu kokomo and suppllers purchase from local reLallers and resLauranLs.
+CA37 (BC:CD<B !DK3BA@ Lhe LoLal changes Lo Lhe orlglnal economy as Lhe resulL of Lhe
lu kokomo's operaLlons. l.e., ulrecL effecLs + lndlrecL effecLs + lnduced effecLs = 1oLal
Lconomlc lmpacLs
What methodology was used in this study?
lMLAn (!/pacL analysls for 1`$"nlng) daLa and sofLware. uslng classlc lnpuL-ouLpuL analysls ln
comblnaLlon wlLh reglonal speclflc Soclal AccounLlng MaLrlces and MulLlpller Models, lMLAn
provldes a hlghly accuraLe and adapLable model for lLs users. 1he lMLAn daLabase conLalns
counLy, sLaLe, zlp code and federal economlc sLaLlsLlcs whlch are speclallzed by reglon, noL
esLlmaLed from naLlonal averages and can be used Lo measure Lhe effecL on a reglonal or local
economy of a glven change or evenL ln Lhe economy's acLlvlLy.
What is employment impact?
LmploymenL lmpacL measures Lhe dlrecL employmenL (employees, sLaff, faculLy,
admlnlsLraLlon) plus addlLlonal employmenL creaLed ln Lhe economy as a resulL of Lhe
operaLlons of lndlana unlverslLy kokomo.
lndlrecL and lnduced employmenL lmpacL refers Lo oLher employees LhroughouL Lhe reglon LhaL
exlsL because of lndlana unlverslLy kokomo's economlc lmpacL. ln oLher words, [obs relaLed Lo
Lhe populaLlon - clLy servlces (pollce, flre), employees aL local hoLels and resLauranLs, clerks aL
local reLall esLabllshmenLs, resldenLs employed by vendors used by lndlana unlverslLy kokomo.


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What is the difference between direct and indirect taxes?
ulrecL Lax dollars lnclude sales Laxes and neL corporaLe lncome Laxes pald dlrecLly by Lhe
lnsLlLuLlon Lo Lhe sLaLe, whlle lndlrecL Laxes lnclude Laxes pald Lo Lhe sLaLe by vendors LhaL do
buslness wlLh lndlana unlverslLy kokomo and lndlvlduals.
Is this a one-time impact or does the impact repeat each year?
1he resulLs presenLed ln Lhe lndlana unlverslLy kokomo economlc lmpacL sLudy are generaLed
on an annual basls. 1he economlc lmpacL ln fuLure years can elLher be hlgher or lower based on
number of employees, sLudenLs, caplLal expanslon, lncreases ln exLernal research and sLaLe
approprlaLlons.
What are Tripp Umbachs qualifications to perform an Economic Impact Study for
Indiana University Kokomo?
1rlpp umbach ls Lhe naLlonal leader ln provldlng economlc lmpacL analysls Lo leadlng
healLhcare organlzaLlons, unlverslLles and academlc medlcal cenLers. We have compleLed more
Lhan 130 economlc lmpacL sLudles over Lhe pasL 20 years for cllenLs such as: 1he ennsylvanla
SLaLe unlverslLy, 1he Chlo SLaLe unlverslLy, 1he unlverslLy of WashlngLon, 1he unlverslLy of
lowa, uA8, Cleveland Cllnlc, unlverslLy of llorlda Shands PealLhCare, Lhe unlverslLy of norLh
Carollna PosplLals, Lhe unlverslLy of ennsylvanla Medlcal CenLer, Lhe unlverslLy of lLLsburgh
Medlcal CenLer and Lhe Chlo SLaLe unlverslLy Medlcal CenLer.