A new study shows that Indiana University Kokomo had a $52.1 million economic impact on the community last year.
But economists warn those numbers may be inflated.
The university’s main campus hired a firm to complete the study and made the results public last week.
It shows that the institution, its employees and visitors to the campus spent $25.1 million in the region in 2010, and the campus had an indirect impact of $27 million.
“It really shows the truth,” IUK Chancellor Michael Harris said. “We’re a huge economic force in the community.”
Vanderbilt University economist John Siegfried said the numbers may be misleading. Siegfried and several other economists will soon publish a revised study on the topic.
According to that study, universities often produce “in-house” economic reports to bolster claims that they contribute significantly to the local economy.
Those economic reports often show “preposterous levels of local benefits,” Siegfried’s report states.
It says there are “pitfalls and pot holes” in the method used to develop these reports.
Harris said he thought the numbers in IU’s economic impact study were accurate or even a little on the conservative side. But even if they were inflated, it wouldn’t matter.
“Maybe I’m wrong,” he said. “Maybe it’s only a $50.7 million impact, but does it really matter? I live here. I know the economic impact we have on the community.”
IUK employs 309 people and created another 317 jobs indirectly through its spending, the economic report states.
It goes beyond just that, Harris said.
The university recently increased financial aid to students by more than 20 percent, which has its own economic impact, Harris said.
“That puts money back in the pockets for students to spend,” he said.
IUK also invested $1 million in a simulation lab for the nursing program, and now, everyone wants to use it, Harris said.
“It’s hard to describe all the ways we impact the economy,” he said. “We’re not an industry, and we’re not a business. We’re key players in the economy.”
IU’s annual economic report also estimated that students, faculty and staff donated $735,981 to local charities. They provided another $2.6 million worth of volunteer service time, the report states.
Harris said that number is “very low.”
“There is a culture of volunteerism here,” he said. “People like to volunteer. They want to volunteer.”
He said there are so many things that faculty and staff do that weren’t measured in the report.
The university’s media department recently created a safety video for Chrysler, Harris said. Many faculty members serve on the board of directors of charitable organizations.
Harris said the study proves what he already knew.
“It proves that investing in the university will have a direct impact on the local economy,” he said.