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The NextGen Precision Health Institute is a $220 million research complex currently under construction on the MU campus.
The numbers Choi stated are estimates for the economic impact of the facility for the next 25 years.
The NextGen Precision Medical Institute, expected to open in October 2021, will serve as a research center for University of Missouri students and experts in a variety of scientific fields.
In a February email update, UM System President Mun Choi boasted of the institute’s economic impact: "The facility construction alone will bring 3,400 jobs and $472 million in revenue to Missouri."
That’s pretty sizable, so we wanted to check it out. Turns out, these numbers are in line with economic projections. Economic forecasts of any kind, however, are inherently flawed.
The future will always differ somewhat from the past, and a small change in factors such as gross domestic product, inflation and interest rates can make predictions incredibly complex.
In his email, Choi linked a UM System news release that cited economic projections for the next 25 years. This estimate was taken from a report by the University of Missouri Economic and Policy Analysis Research Center. But the projections in the release were about the economic impact of the NextGen Initiative as a whole, not the building.
Additionally, the numbers from Choi’s claim were not included in the 34-page economic report we obtained in an email from MU News Bureau Director Christian Basi.
So, where did these numbers come from?
After more emails and a phone interview with MU economics professor Joe Haslag, who co-wrote the university report, we discovered the numbers came from the university’s appropriations request to the state for the NextGen Health Institute.
The request, shared by Basi, stated construction of the NextGen Health Institute would have a $468 million impact on the overall state economy and generate 3,287 jobs.
That’s pretty close to Choi’s email that boasted of 3,400 jobs and $472 million in revenue. Basi said the gap in the numbers from the state request and Choi’s email could be a result of the operating costs not being included in the calculations.
They were generated using a report Basi shared from the Commercial Real Estate Development Association, a research foundation also known as NAIOP. The group produces an annual report to estimate the economic contributions of commercial real estate to the U.S. economy.
The report compiles economic multipliers for each state. Multipliers, supplied by the U.S. Bureau of Economic Analysis, are numbers used to calculate the economic impact of each dollar spent.
In other words, multipliers can tell you if you spend X on a commercial real estate project, this is the estimated number of jobs created and total economic impact.
So, for a construction project that costs an estimated $221 million and a Missouri employment multiplier of 14.8721, the total number of jobs created is 3,287.
With the same construction cost and a Missouri output multiplier of 2.1169, the total economic impact is $467,834,900.
It’s worth noting that predictions aren’t a guaranteed reality. Lots of factors can change over the course of 25 years. So, when Choi said these jobs and economic impact will occur, he was overplaying his claim.
Choi claimed the construction of the NextGen Health Institute alone "will bring in 3,400 jobs and $472 million in revenue to Missouri."
After some digging, we found these numbers were the result of a third-party foundation’s report and used in the university’s capital appropriations request to the state. The request stated the institute would create an estimated 3,287 jobs and have a total economic impact of about $468 million.
Because all figures regarding the economic impact of the NextGen Health Institute are estimates for the next 25 years and Choi’s numbers were very close, we rate this claim Mostly True.
Email Interview, Mun Y. Choi, University of Missouri System President, April 7, 2020
Email and Phone Interview, Christian Basi,Director of University of Missouri News Bureau, April 9, 2020
Phone Interview, Joe Haslag, Professor and Kenneth Lay Chair in Economics for the University of Missouri, April 7, 2020
Missourinet, "University of Missouri System Building "NextGen" Research Hub to Accelerate Disease Treatments, Cures," June 21, 2019
University of Missouri System , "NextGen Precision Health Initiative Research," April 10, 2020
University of Missouri System, "NextGen Precision Health Initiative will improve healthcare and create $5.6 billon impact to Missouri’s economy by 2045, MU economist finds," April 2020
Mun Y. Choi, University of Missouri System President, Email update on NextGen Precision Health Initiative,February 24, 2020
Federal Reserve, "Gauging the Uncertainty of Economic Outlook Using Historical Forecasting Errors: The Federal Reserve’s Approach," February 24, 2017
The Washington Post, "Why economists can’t forecast," March 8, 2017
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