Glossary

Direct, Indirect, and Induced Impacts

• Direct impacts are those created by institutions to employ or purchase goods and services necessary to their operations.
• Indirect impacts are those that result from institutions buying goods and services from businesses within the same geography. An anchor institution purchases goods (e.g., cleaning supplies) or services (e.g., tech support) from local businesses that themselves can support jobs because of the anchor institution’s business. Jobs supported by these business-to-business transactions are indirect jobs.
• Induced impacts are those that result from the household spending of those employed in direct and indirect jobs and that stay within a region. The jobs at the sandwich shop that serves hospital or higher education employees during lunch hour are an example of induced jobs that result from higher education or hospital institutions.

Economic Contribution

This refers to the gross change in economic activity associated with an industry, event, or policy in an existing regional economy. When we report the economic contribution (also referred to as the economic impact) of eds and meds in a regional economy, we’re referring to the ways dollars spent by higher education institutions and hospitals to employ people and fund their operations and buildings flow throughout a regional economy. Impacts are categorized as direct, indirect, and induced.

Employment

Employment refers to an industry-specific mix of full-time, part-time, and seasonal employment for the higher education and hospital industry sectors.

Gross Domestic Product

Gross domestic product (GDP) is the measure of the value of goods and services produced in a specified region.

Higher Education Institutions

North American Industry Classification System (NAICS) industry codes were used for defining higher education institutions, specifically codes 6112 and 6113. These industry codes are consistent with the numerous government data sources used throughout this study. It is worth noting that specific industries related to higher education are not considered as part of this study, including those industries within the broader Educational Services sector (NAICS 61).

Hospital Institutions

A NAICS industry code was used for defining hospital institutions, specifically code 622. This industry code is consistent with the numerous government data sources used throughout this study. It is worth noting that specific industries related to health care and hospitals are not considered as part of this study, including those industries within the broader Health Care and Social Assistance sector (NAICS 62).

Income

Income refers to all forms of employment income, including employee compensation (wages and benefits) and proprietor income.

Metro/Nonmetro

Metro and nonmetro regions are multi-county and defined by the Bureau of Labor Statistics (BLS). For more information about metropolitan and nonmetropolitan statistical area definitions, including counties contained in each region, please see the BLS metropolitan statistical area definitions.

Reliance Index

The reliance index is a calculation that captures how dependent a regional economy is on higher education institutions and hospitals (anchor institutions) for economic activity. The reliance index is calculated as the ratio of a region’s anchor institution economic impact divided by the region’s overall economy, divided by the same ratio calculated at the national level. This calculation (also known as the location quotient) is done for employment, income, and gross value added impacts and then averaged to create the reliance index. 

Search by Region

Regions are either metro or nonmetro regions as defined by the BLS; they include multiple counties and are sometimes multistate regions. To find information about a county associated with a region in a different state, please choose the largest city near the county you are searching for, even if it is in a different state. Data are not available at the county level.