What if the University of Otago didnít exist?

What if the University of Otago didnít exist?

Economics Everywhere | Issue 4

Dunedin. Population: 127,500. Number of university students: 20,000. It’s fair to say that students make up a sizable chunk of the Dunedin population. The University brings in young adults from near and far, and with them their money. Let’s face it; McDonalds wouldn’t nearly be as successful without students drunkenly showing up at 2am. So what if the University didn’t exist?

As if Otago knew one of their own undergrads would be asking this exact question, they put out an annual economic impact report. The report, released in 2015, outlines the economic contribution of the University both to the Dunedin area and the rest of the nation. 

According to the report, the university is one of the 50 largest employers in the country and, unsurprisingly, one of the biggest in the South Island. Our campus here in Dunedin pumped an estimated $881.1 million into businesses in the area through direct spending by staff and students. However, the university also has several other campuses sprinkled across the country. The Christchurch campus injected 51.9 million into local businesses, while the Wellington site contributed 50.5 million. The branch of the College of Education in Invercargill contributed 2.4 million. The university’s Auckland centre and their Wellington City Office both injected 800,000 into their respective economies. This makes for a grand total of almost a billion dollars in direct spending alone.

Now, to take into account the trickle-down or down-stream effects, the economic model in the report estimates that the Dunedin campus added 1.55 billion to the city’s economy; helping support 13,902 jobs directly and indirectly. Of course there are also other benefits the university provides that are far harder to quantify. 

However, if the university didn’t exist the nation wouldn’t lose 20,000 students; instead many of those students would simply attend a different institution. But with only a handful of big universities in New Zealand, Otago provides competition, which is vital to maintaining the quality of both education and resources as universities try to attract more and more students. 

All in all, it is no secret that the only thing keeping Dunedin from shrinking to the size of Invercargill is the University of Otago. 

This article first appeared in Issue 4, 2017.
Posted 2:36pm Sunday 19th March 2017 by Danni Pintacasi.