How to Measure the Local Economic Impact of Universities? Methodological Overview
How to Measure the Local Economic Impact of Universities? Methodological Overview

Summary/Abstract: Today, the realization that certain economic units,such as universities or other large tertiaryeducational institutions have an impact on theeconomy of their region has gained prominence.There is a growing demand for precise studies onthe economic impact of such entities, and theissue has attracted considerable attention in thescientific community. The examination of theireconomic impact is especially interesting when wecompare regions with different levels ofdevelopment, characterized by a successfulinternational university. The different methodsused in the literature render comparisons difficult;therefore, our focus is to recommend a methodfor investigating universities in differentcountries. In the absence of regional input-outputmatrices, a multiplier based approach is suggestedfor the first and second mission (education andresearch), while the application of a set ofindicators is recommended for the third mission(knowledge transfer-related). There are severalsubstantial problems in assessing the economicimpact of universities. First, the definition ofimpact; second, measuring and estimating firstroundexpenditures and avoiding doublecounting;third, estimating the model parameters(e.g. multipliers); fourth, the quantification ofthird mission activities. In this paper, we clarifytheoretical definitions, resolve somecontradictions, and consequently, recommend afeasible method considering the circumstances in Hungary.

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