Student spending tip of NKU's impact here

One of the most frequent questions I have been asked over the years is: What is the impact of Northern Kentucky University on the region? While I know most people are looking for a simple, cumulative number, given the size and scope of a modern university, such an answer is not readily available.

NKU's overall economic impact affects numerous and varied aspects of the local economy. A good example is the institution's spending on supplies and payroll, which in and of itself has a variety of economic impacts. Such spending supports area businesses as does the off-campus spending of its students.

The university also impacts the quality of life in the region. At NKU, you can take in a rock concert, cheer at a sporting event and listen to speeches from political candidates, religious scholars and faculty researching everything from caves to dark matter. And the most important impact of a university is through its education of the local workforce and its impact on the lifelong earnings of its students.

Over the next year, I will be writing occasional articles highlighting the various impacts of NKU on the region, beginning today with a look at the economic impact of student expenditures off campus.

While attending NKU, students have a significant impact on the local economy. They spend large sums of money in the community on things such as homes, food, transportation, entertainment, clothing and cellphones. While it is true that many of these students already lived in the region, without NKU they would likely take their dollars in search of educational opportunities elsewhere.

In 2010, NKU's nearly 14,000 students spent $174 million off campus supporting local businesses. These direct expenditures included $75 million on retail purchases, $39 million on restaurants and entertainment, $27 million on rent and $33 million on items such as insurance, cellphone service and transportation. That was in one year, and those numbers have likely increased since.

Can you imagine this region without NKU's students? Think of all the business owners large and small who rely heavily on that spending to thrive and drive their businesses' growth.

These direct expenditures ripple through the local economy, as one person's spending becomes another's income. Taking this multiplier effect into account, NKU students supported $270 million of total revenues in 2010:

• $115 million on retail purchases.

• $62 million on restaurants and entertainment.

• $35 million on rent.

• $56 million on insurance, cellphone service, transportation, etc.

NKU student spending directly supported 2,089 jobs and $54 million in labor income (wages and benefits). Taking into account multiplier effects, student expenditures had a total economic impact of $270 million in output, 2,905 jobs and $85.4 million in labor income in 2010.

The survey was conducted by an NKU Haile/U.S. Bank College of Business 2011 market research class. Approximately 14,000 students were invited to participate, and the response rate was 16 percent; the response group was similar to the student body. The Center for Economic Analysis and Development estimated direct student spending in the local area and estimated total economic impacts, including multiplier effects, of that spending.

An executive summary of the report is available online at NKYbytheNumbers.nku.edu. ■

Janet Harrah is senior director of the Center for Economic Analysis and Development, Haile/U.S. Bank College of Business, Northern Kentucky University.