Economic impact of university veterinary diagnostic laboratories: A case study

Veterinary diagnostic laboratories (VDLs) play a significant role in the prevention and mitigation of endemic animal diseases and serve an important role in surveillance of, and the response to, outbreaks of transboundary and emerging animal diseases. They also allow for business continuity in livestock operations and help improve human health. Despite these critical societal roles, there is no academic literature on the economic impact of VDLs. We present a case study on the economic impact of the Iowa State University Veterinary Diagnostic Laboratory (ISUVDL). We use economic contribution analysis coupled with a stakeholder survey to estimate the impact. Results suggest that the ISUVDL is responsible for $2,162.46 million in direct output, $2,832.45 million in total output, $1,158.19 million in total value added, and $31.79 million in state taxes in normal years. In an animal health emergency this increases to $8,446.21 million in direct output, $11,063.06 million in total output, $4,523.70 million in total value added, and $124.15 million in state taxes. The ISUVDL receives $4 million annually as a direct state government appropriation for operating purposes. The $31.79 million in state taxes in normal years and the $124.15 million in state taxes in an animal health emergency equates to a 795% and 3104% return on investment, respectively. Estimates of the economic impact of the ISUVDL provide information to scientists, administrators, and policymakers regarding the efficacy and return on investment of VDLs.