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Study Finds Mason Contributes $1.6 Billion to the Economy

By Carrie Lake, BA Communication ’99

What would Northern Virginia be without George Mason University? While the answer to this question is not clear-cut, a new study by School of Public Policy professor Stephen Fuller shows that the university’s total economic impact to the Commonwealth of Virginia in fiscal year 2005 was $1.6 billion—with the Northern Virginia region receiving almost $600 million.

“Mason is a significant force within the Northern Virginia economy as a generator of jobs, a source of consumer spending and investment, and as host to students and visitors whose spending would not have been captured by Northern Virginia businesses in the absence of the university’s existence,” says Fuller.

Fuller, the Dwight Schar Faculty Chair and University Professor and director of the Center for Regional Analysis, presented highlights from the study, “The Impact of George Mason University on the Northern Virginia Economy,” to a group of local government leaders last fall. The study focuses on the economic benefits generated by the university and also highlights Mason as a desirable amenity in the region.

The Value of Immeasurables

Mason’s immeasurable qualities distinguish it from any other institution, the report states.

“The value of the university that cannot be measured likely far exceeds the [monetary] values reported in the study,” Fuller says. For example,

• In Fairfax County, Mason is seen as a major amenity that provides residents and businesses a cultural focus, a source of educated workers, and an identity that distinguishes the county from other jurisdictions that lack a major university.
• In Prince William County, Mason collaborates with the business community, offering joint-venture opportunities to new and expanding businesses. Local residents also see it as an amenity and community facility—a role that will increase as western Prince William County develops.
• In Arlington, Mason is a center of education that emphasizes professional programs and serves as a common ground for debate and a place where the business community and government can come together to discuss new and challenging issues.
• Mason’s newest location in Loudoun County extends all three roles to a portion of Northern Virginia that is projected to experience substantial population and employment growth over the next 25 years.

Quantifying the Economic Impact

Not unlike other universities, Mason generates jobs and income and does business with suppliers. Its students buy goods and services from local merchants, and it attracts visitors who in turn contribute to the local economy. Most of these benefits can be measured in dollar terms:

• Payroll spending by the university, totaling $255.2 million, was the largest single source of economic impact, accounting for 44 percent of all direct outlays. Northern Virginia captured 81 percent based on the place of residence of university employees.
• The university’s procurement of goods and services from vendors was the second largest source of economic impact, totaling $151.3 million, but it had the smallest percentage (31 percent) accruing to businesses based in Northern Virginia.
• The third largest source of economic impact was off-campus student spending, estimated to total $137.7 million with $125.3 million, or 91 percent, captured by businesses in Northern Virginia.
• Spending by retirees, visitors, and the George Mason University Foundation combined accounted for $38.4 million in total spending, or 7 percent, of all university-related spending in 2005.

In addition to the annual benefits the Northern Virginia economy receives, the university’s planned capital spending will have a significant impact. The proposed construction-spending program for the 2004–08 period includes $231 million for new construction on the Fairfax, Arlington, and Prince William Campuses. In addition, the George Mason University Foundation is investing $67 million in capital construction at the Arlington Campus. If all this construction occurs as planned, it would generate $430.5 million total economic value to the Northern Virginia economy over the five-year period. It would also support an increase of $62.3 million in new personal earnings accruing to residents of Northern Virginia and generate 4,911 new year-round, full-time equivalent jobs.

About the Study

“When you do an economic analysis you should only count new money—that’s the money we are getting in this region that we wouldn’t have gotten if the university had not been here,” Fuller says.

As a result, student spending by part-time students who were Northern Virginia residents prior to admission to Mason was not included, as this spending would likely have occurred in Northern Virginia in the absence of the university’s existence. Similarly, a substantial share of the spending of full-time undergraduates living at home in Northern Virginia was excluded.