As pointed out earlier, some of this controversy comes about because of the difficulty of
measuring the exact contribution of colleges and universities to economic growth. Standard
economic base analysis can do a good job of accounting for the payroll, spending, and
employment contributions of a university to a community, but relies on estimates of
economic multipliers to determine the secondary benefits of university activities. Studies
have produced a range of multipliers (ranging from 1 to 3) and estimates of economic
benefits are highly sensitive to the choice of multiplier. Perhaps most problematic is that
these studies cannot provide any estimate of whether this is the best use of economic
assets for a given region. If the university were not in the community, the same land and
resources would undoubtedly have been used for some other activity and may have
produced a similar or higher level of economic growth. Other studies focus on the influence
of universities’ outputs on human capital and technology. These studies examine the role
of higher wages received by college graduates in the local economy, as reflected in higher
tax revenues, consumer spending, and personal savings. Of course, for college towns to
capture such benefits, graduates need to stay in the communities where they were
educated.