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Measuring the local economic impact of universities: an approach that considers uncertainty

In: Investigaciones de Economía de la Educación 5

Author

Listed:
  • Jose M. Pastor

    (Universitat de Valencia & Ivie)

  • Juan Fernández de Guevara

    (Universitat de Valencia & IVIE)

  • Francisco Pérez

    (Universitat de Valencia)

Abstract

The contribution of universities to society is due to both supply and demand side effects, the latter being associated with the injection of demand as a result of the activities these institutions carry out. This paper focuses on the impact of the demand side by designing a methodology based on Monte Carlo simulations so as to introduce stochastic elements in calculating the economic impact of universities. We apply this methodology to the case of Valencian state universities, introducing stochastic elements in all the elements which imply assumptions with uncertainty. The results highlight the importance of considering uncertainty by generating multipliers which can vary around the average value by 18% in the case of output and employment, and 10% in the case of income.

Suggested Citation

  • Jose M. Pastor & Juan Fernández de Guevara & Francisco Pérez, 2010. "Measuring the local economic impact of universities: an approach that considers uncertainty," Investigaciones de Economía de la Educación volume 5, in: María Jesús Mancebón-Torrubia & Domingo P. Ximénez-de-Embún & José María Gómez-Sancho & Gregorio Gim (ed.), Investigaciones de Economía de la Educación 5, edition 1, volume 5, chapter 54, pages 1061-1090, Asociación de Economía de la Educación.
    • Handle: RePEc:aec:ieed05:05-54
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    References listed on IDEAS

    as
    1. Attila Varga, 2000. "Local Academic Knowledge Transfers and the Concentration of Economic Activity," Journal of Regional Science, Wiley Blackwell, vol. 40(2), pages 289-309, May.
    2. Joshua Drucker & Harvey Goldstein, 2007. "Assessing the Regional Economic Development Impacts of Universities: A Review of Current Approaches," International Regional Science Review, , vol. 30(1), pages 20-46, January.
    3. Zvi Griliches, 1998. "Issues in Assessing the Contribution of Research and Development to Productivity Growth," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 17-45, National Bureau of Economic Research, Inc.
    4. Rubén Garrido-Yserte & María Gallo-Rivera, 2010. "The impact of the university upon local economy: three methods to estimate demand-side effects," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 44(1), pages 39-67, February.
    5. Siegfried, John J. & Sanderson, Allen R. & McHenry, Peter, 2007. "The economic impact of colleges and universities," Economics of Education Review, Elsevier, vol. 26(5), pages 546-558, October.
    6. repec:rre:publsh:v:33:y:2003:i:1:p:73-84 is not listed on IDEAS
    7. Martin, Fernand, 1998. "The economic impact of Canadian university R&D," Research Policy, Elsevier, vol. 27(7), pages 677-687, November.
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    Citations

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    Cited by:

    1. Sandra Saúde, Carlos Borralho, Isidro Féria, Sandra Lopes, 2014. "The economic impact of a higher education institution – the study case of the polytechnic institute of beja, portugal," Journal of Finance and Financial Law, University of Lodz, Faculty of Economics and Sociology, Faculty of Law and Administration, vol. 1(1), pages 55-66, February.
    2. Sandra Saúde, Carlos Borralho, Isidro Féria, Sandra Lopes, 2014. "The economic impact of a higher education institution – the study case of the polytechnic institute of beja, portugal," Annales. Ethics in Economic Life, University of Lodz, Faculty of Economics and Sociology, vol. 1(1), pages 55-66, February.

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    More about this item

    Keywords

    Impact; Uncertainty; Universities; Input-output analysis; Monte Carlo;
    All these keywords.

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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