By David Dodson

The university’s impact on the Athens economy is nearly $1 billion annually, according to a new study by the Terry College of Business.
“Faculty and staff salaries and, secondly, student spending are the leading contributors to the Athens economy,” says Jeff Humphreys, director of economic forecasting in the college and the study’s lead author. “More than one out of every five jobs held by local residents owes its existence to UGA-related spending.”
The study added up UGA spending on operating expenses, construction and salaries and fringe benefits paid to Athens residents, and then estimated student spending in Athens. Next, spending generated by athletics was added in. The total economic impact came to $966 million for the fiscal year that ended in June.
The study is the most reliable report to date on the economic value added to the Athens economy by the university. However, the report intentionally underestimates UGA’s total impact because of what it does not attempt to calculate.
“Even though this study measured a billion-dollar impact on the Athens economy, the actual economic impact is much higher,” Humphreys says. “Our study does not include some types of income and benefits that we know exist but are difficult to measure accurately without survey research.” Humphreys cites as examples faculty income from outside consulting and UGA visitor spending (other than athletics).
“All of us living in the Athens area know that the University of Georgia has a huge impact, in many wonderful ways and in some problematical ways, on the quality of our lives. This study is a first attempt, as we begin to be more systematic in our planning efforts, to describe precisely the economic benefits of UGA to the community,” says Donald R. Eastman, vice president for strategic planning and public affairs.
“These benefits are very real, and very important,” Eastman says.
“They are, of course, only part of the story. There are qualitative benefits to the community not included in this study, including the wide variety of facilities--from the State Botanical Garden to the music halls--frequently visited by the public. And there are also costs to the community of having UGA in its midst, which are not calculated in this study.”
To measure the ripple effect of every dollar UGA brings to Athens, Humphreys applied a common statistical device called a multiplier. Starting from initial expenditures, a multiplier traces the flow of re-spending that occurs locally and tallies that re-spending round after round until it completely leaks out of the local economy.
For instance, when a student eats at a local restaurant, the tip might be re-spent locally by the server and a portion of the bill may resurface at an Athens food wholesaler. Using this method, Humphreys determined that every UGA dollar spent locally generates an additional 44 cents for the Athens economy.
In this study, the Athens economy and metro area are defined as Clarke, Oconee and Madison counties. The study was written by Humphreys; David G. Clements, director of Institutional Research and Planning; Jo Anne Lowe, IRP’s associate director; and Tracie W. Sapp, IRP’s assistant director. The Office of the Vice President for Strategic Planning and Public Affairs requested the study.