In July 2010, Tripp Umbach was retained by UAB to measure the economic, employment and government revenue impacts of its current operations and research, as well as the projected impact of UAB as a whole, utilizing different scenarios of growth. The primary goal of the UAB economic impact study was to calculate the current (FY 2008-2009) and projected (FY 2019-2020) business volume, employment and government revenue impacts of UAB’s operations on the state of Alabama and the Birmingham-Hoover MSA.
UAB entities included in this analysis are UAB campus operations, UAB Medicine and the Southern Research Institute.
METHODOLOGY EMPLOYED IN THE UAB ECONOMIC IMPACT STUDY
This economic impact analysis measures the effect of both direct and indirect business volume and government revenue impacts for UAB. The methodology employed in the calculation of these impacts is derived from the standard set of impact research tools developed by the American Council on Education (ACE) for the measurement of college and university economic impact. The ACE-based methodology is well-established, having been used in hundreds of impact studies throughout the United States. The ACE methodology employs linear cash-flow modeling to track the flow of institution-originated funds through a delineated spatial area. For the UAB impact analysis, computerized spreadsheet models were developed for the University as a whole, including the entities that comprise UAB Medicine.
Economic impact begins when an organization spends money. Economic impact studies measure the direct economic impact of an organization’s spending plus additional indirect spending in the economy as a result of direct spending. Economic impact has nothing to do with dollars collected by institutions.
Total economic impact measures the dollars that are generated within the state of Alabama due to the presence of UAB. This includes not only spending on goods and services with a variety of vendors within the state, and the spending of its staff and visitors, but also the business volume generated by businesses within Alabama that benefit from UAB’s spending. It is important to remember that not all dollars spent by a university remain in its home state. Dollars that “leak” out of the state in the form of purchases from out‐of‐state vendors are not included in the university's economic impact on the state. The multipliers utilized in this study are standard multipliers for public research universities in the United States, with the state multiplier being 2.3 for the statewide business volume impact and 2.5 for the employment impact.
In completing this report, Tripp Umbach used data supplied by UAB and from Tripp Umbach’s national databases developed over the years by conducting economic impact studies commissioned by a variety of prominent universities and medical schools throughout the country as a baseline. To complete the economic, employment and government revenue projections of UAB’s operations out to FY 2019-2020 for this report, Tripp Umbach worked closely with UAB leadership to develop three unique growth scenarios for the University. The three scenarios (conservative, mid-range and aggressive) are described in the table below and represent a range of potential economic impact for UAB.
|Increase in Undergraduate Students (in-state/out-of-state)
|Increase in Graduate and Professional Students (in-state/out-of-state)
|Increase in Staff (jobs)
|Increase in Faculty (jobs)
|Increase in Fellows (jobs)
|Increase in Student Employees (jobs)
|Total Campus Expansion Costs (2015-2020 average) ($)
|Increase in External Sponsored Research
Key economic impact findings presented within the summary include the total current (FY 08-09) economic, employment, and state and local government revenue impact of UAB’s operations, as well as the projected mid-range scenario (FY 19-20).