Study details university's impact

A Southeast Missouri State University study confirmed what area business owners already knew: Without the university, some of them would be toast.

There's a lot of buying power when you put an extra 9,500 people in one place. Those people have to eat, pay rent, drive a car and clothe themselves, but they also end up getting tattooed, drinking a few beers and listening to CDs.

All of that results in a $51.2 million direct impact on the local economy, according to a study of Southeast's students.

The student researchers took Dr. Judy Wiles' Introduction to Business Research class in the spring. Their project: Find 266 students who live on and off campus and take more than six credit hours. Ask them detailed questions about how they spend their money and how much they spend during the nine months of the academic year.

The study only took in Cape Girardeau County and Scott City, not money spent in St. Louis or other cities where many of the students live and visit.

There were 51 survey categories in all, everything from driving to tanning to prescription drugs. The top 10, in order by percentage of money spent: groceries, dining out, gasoline, car payments, rent, clothing, alcohol out, cell phone, shopping with family and alcohol from the store.

That study became part of a more comprehensive one completed by Dr. Bruce Domazlicky, economics professor. Domazlicky found that the university as a whole contributes $125.7 million a year to the local economy, up from the $121.4 million in a similar study conducted in 1998.

The figure includes money spent by students, earnings spent by university employees and business done by the university with local vendors.

Direct expenditures accounted for $80.9 million annually. Indirect spending, the economic activity sometimes referred to as the multiplier effect, was another $36.9 million annually. A conservative multiplier of 1.75 was used in this study, although some studies use a multiplier of four or higher.

Economists use the multiplier to describe the total effect of dollars as they are circulated in the economy. That means a dollar may be spent by one person and become income for a second person, who in turn spends the money again.

Local business owners don't need a mathematical formula to make their hearts go pitter-patter at the sight of the university residence halls filling up with students.

This is one of the main reasons local businesses throw their support behind the growing university, which is making major economic contributions in return.