Tuesday, June 15, 2004


Truck and Barter says that an economic impact report on the University of California at Berkeley concludes the campus is a net drag on the Berkeley city budget. Bob points out that much of the benefit spills over to the rest of the Bay Area, and suggests that it negotiate with other cities for compensation. But how could it exclude, say, Oakland from receiving the benefits of UC Berkeley?

These reports are always suspect. It's apparent all the Berkeley study did was measure direct impacts on the city budget, so the school's right to say the measure has understated the full impact. But if most of the impact spills over into Oakland, then the impact isn't that large. And that problem pervades most of these types of reports. Here's an example I googled from SUNY Albany saying that $1.005 billion of the total economic impact of $1.119 billion stays in the Albany region. That's probably poppycock, as most certainly is a multiplier analysis that says $1 put into SUNY Albany generates $8.85 in benefits to the Albany region. Were that true, they should quadruple the budget.

UPDATE: Stephen comments on the Berkeley study and also links to this suggestion that the University of Michigan privatize.
A privatized University of Michigan would almost certainly raise its tuition rates to help compensate for the loss of state revenue, as well it should. It is not unfair to ask those who benefit directly from earning the highly valued U of M degree to bear a greater burden to pay for it, especially considering the financial background of most of the school�s students.

A 2003 Detroit Free Press story reported that over 51 percent of the University of Michigan�s freshman class comes from households with incomes above $100,000 per year. Yet, only 12.7 percent of Michigan households earn such incomes, according to calculations using 2000 Census figures.

Tuition hikes could actually help those students who truly need help � by enabling the school to offer greater outright gift aid and tuition reductions to students from low-income families, as is often the practice at private universities. Needy students at public institutions currently rely more on loans and work study programs.
We had the same thought about SCSU a few months ago.