K-State’s economic impact was estimated using IMPLAN (IMpact Analysis for PLANNING), an econometric modeling system developed by applied economists at the University of Minnesota and the U.S. Forest Service. The IMPLAN modeling system has been in use since 1979 and is used by more than 500 private consulting firms, university research centers, and government agencies. The IMPLAN modeling system combines the U.S. Bureau of Economic Analysis input-output Benchmarks with other data to construct quantitative models of trade flow relationships between businesses and between businesses and final consumers. From this data, one can examine the effects of a change in one or several economic activities to predict its effect on a specific state, regional, or local economy (impact analysis). The IMPLAN input-output accounts capture all monetary market transactions for consumption in a given period. The IMPLAN input-output accounts are based on industry survey data collected periodically by the U.S. BEA and follow a balanced account format recommended by the United Nations.

IMPLAN’s Regional Economic Accounts and the Social Accounting Matrices were used to construct state- and CSA-level multipliers, which describe the economy’s response to a change in demand or production caused by K-State activities and expenditures. Each industry that produces goods or services generates demand for other goods and services, and this demand is multiplied through a particular economy until it dissipates through “leakage” to economies outside the specified area. IMPLAN models discern and calculate leakage from local, regional, and state economic areas based on workforce configuration, the inputs required by specific types of businesses, and the availability of both inputs in the economic area. Consequently, economic impacts that accrue to other regions or states because of a change in demand are not counted as impacts within the economic area.

The model accounts for substitution and displacement effects by deflating industry-specific multipliers to levels well below those recommended by the U.S. Bureau of Economic Analysis. In addition, multipliers are applied only to personal disposable income to obtain a more realistic estimate of the multiplier effects of increased demand. Importantly, IMPLAN’s Regional Economic Accounts exclude imports to an economic area, so the calculation of economic impacts identifies only those impacts specific to the economic impact area. IMPLAN calculates this distinction by applying Regional Purchase Coefficients (RPC) to predict regional purchases based on an economic area’s characteristics. The RPC represents the proportion of goods and services purchased regionally under normal circumstances based on the area’s economic characteristics described in terms of actual trade flows.

IMPLAN analysis measures jobs/positions (part-time or full-time), not full-time equivalents (FTEs). Full-time and part-time employees impact the economy and support additional indirect and induced employment throughout the region. Employment data was provided as an output of all individuals who receive a paycheck from K-State. This includes all full-time, part-time, and employed faculty, staff, students, and independent contractors.

The overall economic impact values provided in this report for K-State include the following impact values that were broken out as sub-analyses:

• Organizational spending – capital and operational
• Student, faculty, and staff spending
• Visitor spending

The following impacts are in addition to the economic impact of the spending categories listed above:

• Community benefit impacts
• Charitable donations and value of voluntary services
• Alumni impacts
• Commercialization of research and innovation.

State and local tax impacts generated in the current FY23 study included all taxes paid by K-State to Kansas (i.e., payroll, property, sales, unemployment, income, and any other taxes paid to the state and local government). Any federal taxes paid by K-State were not included in the state and local tax impacts (i.e., FICA payments).

Impact analysis aims to quantify the impact of attracting “fresh” dollars to a region. Therefore, when including visitor spending in the impact analysis of a university, health system, or other organization, the analysis will include only those visitors coming to a region from outside of the region. Visitors to events who also live in the region would have spent their dollars in that region otherwise; therefore, this dollar was not attracted to the region because of the organization being analyzed. For K-State, the impact analysis looked at impacts on the state of Kansas and the Manhattan, Salina, and Olathe regions. Visitors to K-State were counted only if they were from outside the region being analyzed.

Tripp Umbach employs federal per diem rates to approximate visitors' spending in a specific area. Per diem rates are considered a conservative measure, with visitors typically spending more than these rates in any given area.

The rates specifically applied for this analysis include:

• Standard Rate: $98 for lodging, $44.25 for meals and incidental expenses

Community benefits in this report outline two forms of impact — monetary donations made by employees and students to local nonprofits and volunteer hours valued at a monetary value.

• Tripp Umbach conducted survey research to estimate the monetary donations an individual (student, staff, faculty, or physician) will likely make in a year. While this amount varies per person, it generally falls in the range of $500 to $700. Adjustments were made to account for individuals who do not donate.
• Independent Sector has established the value of a volunteer hour at $31.80 per individual per hour. Tripp Umbach applied this value, considering the average number of hours faculty, staff, and students spend on volunteer activities (estimated at 100 hours per year for 50% of employees and students).

The impact of K-State research was measured as the yearly effect of its expenditures in FY23. The analysis examines the expenditures made during FY23 to estimate the annual impact of K-State research on the state economy.

Economic impact begins when an organization spends money. Economic impact studies measure the direct impact of an organization’s spending plus additional indirect spending in the economy caused by direct spending. The economic impact has nothing to do with dollars collected by institutions, their profitability, or even their sustainability since all operating organizations have a positive economic impact when they spend money and attract spending from outside sources.

Direct economic impact measures the dollars generated within a geographic region because of the presence of an institution. This includes spending on goods and services with vendors within the region and the spending of its employees and visitors, as well as the economic impact generated by businesses within the region that benefit from the institution's spending. It is important to remember that not all dollars spent by an institution stay in the geographic region of study. Dollars that “leak” out of the region in purchases from out‐of‐area vendors are not included in an institution's economic impact on the region.

The total economic impact includes the “multiplier” of spending from companies that do business with an institution. Support businesses may include lodging establishments, restaurants, construction firms, vendors, temporary agencies, etc. Spending multipliers attempt to estimate the ripple effect in the economy where the spending occurs. For example, spending by an institution with local vendors provides these vendors with additional dollars that they re‐spend in the local economy, causing a “multiplier effect.”

Multipliers measure secondary impacts stemming from an organization's spending. For example, an employment multiplier of 1.8 would suggest that for every 10 employees hired in the given industry, eight additional jobs would be created in other industries, such that 18 total jobs would be added to the given economic region. The multipliers used in this study range from 1.8 to 2.0.

Three types of effects are measured with a multiplier: the direct, the indirect, and the induced effects. The direct effect is the known or predicted change in the local economy to be studied. The indirect effect is the business-to-business transactions required to satisfy the direct effect. Finally, the induced effect is derived from local spending on goods and services by people working to satisfy the direct and indirect effects.

IMPLAN (IMpact analysis for PLANning) data and software. Using classic input-output analysis in combination with regional-specific social accounting matrix and multiplier models, IMPLAN provides a highly accurate and adaptable model for its users. The IMPLAN database contains county, state, ZIP code, and federal economic statistics that are specialized by region, not estimated from national averages, and can be used to measure the effect on a regional or local economy of a given change or event in the economy’s activity.

Employment impact measures the direct employment (employees, staff, faculty, administration) plus additional employment created in the economy due to an institution's operations.

Indirect and Induced employment impact refers to other employees throughout the region who exist because of an institution’s economic impact. In other words, jobs related to the population — city services (police, fire, EMS, etc.), employees at hotels and restaurants, clerks at retail establishments, and residents employed by vendors used by the institution.

Direct tax dollars include sales taxes and net corporate income taxes paid directly by the institution to the state. In contrast, indirect taxes include taxes paid to the state by vendors that do business with an institution and individuals.

The results presented in this economic impact study are generated annually. The economic impact in future years can be either higher or lower based on the number of employees and students, capital expansion, increases in external research, and state appropriations.