Students consumption expenditures in economic impact studies: assumptions revisited in an input-output approach for Scotland

Hermannsson, K. , McGregor, P. G. and Swales, J. K. (2018) Students consumption expenditures in economic impact studies: assumptions revisited in an input-output approach for Scotland. Regional Studies, 5(1), pp. 57-77. (doi: 10.1080/21681376.2018.1428499)

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Abstract

This paper revisits the application of impact-study methods to the consumption expenditures of students. Whilst the academic literature on the subject is mature, it has traditionally applied simplifying assumptions concerning the exogeneity of expenditures, which tend to over- or underestimate the impact of local students, depending on the particular approach adopted. To resolve this issue, we invoke the principles of input–output analysis and specify a model where consumption expenditures can be partially endogenous and partially exogenous. The origin of the income used to fund consumption expenditures determines their exogeneity. This model is calibrated using the results from an income-expenditure survey. These general issues are relevant to any application of impact analysis where the initial injection is a consumption expenditure shock. The approach is demonstrated using Scottish data for 2013. Figures are produced, on a comparable basis, for the effects of the consumption expenditure of students from each of the Scottish higher education institutions (HEIs). We demonstrate that the biases introduced by employing the assumptions usually adopted in the literature are particularly distorting for HEIs that largely serve local students.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Hermannsson, Dr Kristinn
Authors: Hermannsson, K., McGregor, P. G., and Swales, J. K.
College/School:College of Social Sciences > School of Education > Robert Owen Centre
College of Social Sciences > School of Education > Educational Leadership & Policy
Journal Name:Regional Studies
Publisher:Taylor & Francis
ISSN:0034-3404
ISSN (Online):1360-0591
Published Online:08 February 2018
Copyright Holders:Copyright © 2018 The Authors
First Published:First published in Regional Studies 5(1):57-77
Publisher Policy:Reproduced under a Creative Commons License

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Project CodeAward NoProject NamePrincipal InvestigatorFunder's NameFunder RefLead Dept
464781The overall impact of HEIs on regional economies in the UK.Richard HarrisEconomic and Social Research Council (ESRC)RES-171-25-0032BUS - ECONOMICS