Economic Report
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Texas Veterinary Medical Association ECONOMIC REPORT 2017 INTRODUCTION The Texas Veterinary Medical Association (TVMA) and the American Veterinary Medical Association (AVMA) conducted a workforce analysis of the veterinary profession and the economic impact of the veterinarians in the state of Texas. The objectives of this report are: • To present the general economic conditions of Texas and their implications on the veterinary profession; • To evaluate and describe supply and demand in the market for veterinary education; • To evaluate and describe supply and demand in market for veterinarians, providing an overview of the veterinary workforce in Texas and factors affecting income, student debt, hours worked per week, and underemployment; • To evaluate and describe the market of veterinary services in Texas; and • To determine the economy-wide impacts of the veterinary profession in Texas. In 2016, the AVMA in collaboration with the Survey Research Laboratory of the University of Illinois at Chicago launched the first Census of Veterinarians. The same census questionnaire was sent to all members of the TVMA and to a random sample from the AVMA membership list. Findings from the two groups are presented in this report to allow a comparison between Texas veterinarians and the general population of U.S. veterinarians. Because the random sample was drawn from the AVMA membership list, it is possible that members from the TVMA were selected to take part of the AVMA sample. To avoid duplication, those in the AVMA sample were excluded from completing the TVMA questionnaire. The survey was electronically delivered and kept active for three weeks. A reminder was sent at the end of each week, and the survey officially closed at the end of the third week. Of the 21,638 AVMA questionnaire recipients, 2,545 were returned, yielding a response rate of 11.8 percent of the AVMA member sample. The TVMA questionnaires were sent to 3,212 and 354 responses were received leading to a response rate of 11.0 percent of the TVMA population. Page 2 of 151 04.21.17 AVMA Assistance Animals: Rights of Access and the Problem of Fraud © Copyright 2017. American Veterinary Medical Association. All rights reserved. The quantitative analysis of the responses may be viewed in three major aspects: the descriptive statistics, the analysis of variance, and the linear regression or factor analysis. Descriptive statistics summarize the general trends of the data collected. These statistics give an overview of the observations in the sample. A better use of these summary statistics requires that a weighted coefficient be applied to each of these distributions to account for the true distribution of the population. A generalized linear model was used for the analysis of the variance. The purpose of this analysis of variance is to determine whether there are significant differences in means across selected groups. For instance, one might need to know whether the average number of hours worked per week differs between female and male veterinarians. Another example is to see whether the difference in professional income between veterinarians with board certification and veterinarians without certification is statistically significant. The third aspect is to determine what factors affect income, student debt, underemployment, and expected years to retirement using quantitative methods. For this purpose, simple linear regression models were applied to the observed data. The simple linear regression models are preferred statistical models when the response variables are continuous and when statistical assumptions such as linearity of the variables, multivariate normality, low multicollinearity, no auto-correlation, and homoscedasticity are met. The estimates produced under these statistical assumptions are then called Best Linear Unbiased Estimators (BLUE). This report contains five components: (1) the general economic conditions of Texas; (2) the market for veterinary education; (3) the market for veterinarians; (4) the market for veterinary services; and (5) the economic impact analysis of the veterinary profession in Texas. The general economic conditions present macroeconomic measures that can be used to assess the economic health of the state. Veterinary markets are tied to the economic performance of the region, and an overview of the trends or a forecast of performance metrics can help the profession’s decision makers. The market for veterinary education provides information about the supply and the demand for veterinary education in Texas. The Texas A&M College of Veterinary Medicine and Biomedical Sciences is the major supplier of veterinarians in Texas. In this report, a comparison is made, in terms of tuition and fees, living expenses, Page 3 of 151 04.21.17 AVMA Assistance Animals: Rights of Access and the Problem of Fraud © Copyright 2017. American Veterinary Medical Association. All rights reserved. and NAVLE pass rate, between the Texas A&M veterinary school and veterinary colleges in relatively close proximity. The market for veterinarians provides an overview of the veterinary workforce in Texas. This section presents the demographics of the respondents, and uses quantitative analyses to determine factors affecting some important measures such as income, underemployment, number of hours worked per week, and student debt. It also determines the net present value (NPV) of a DVM degree. The market for veterinary services presents an estimation of the population of each type of pertinent animal in each of the Texas regions using secondary data from the Census of Agriculture or estimated data from the AVMA pet population calculator. The number of veterinary practices per region was estimated using the U.S. Department of Commerce (USDC) estimations. Also estimated was the potential size of the market of companion animal and large animal veterinary services by combining information from the Census of Agriculture, the pet population calculator, and the USDC. For the EIA, the IMPLAN input-output model was used to estimate the economy-wide impacts of veterinarians on regional economies. EXECUTIVE SUMMARY As with other states, and the nation as a whole, how the Texas market for veterinary services fares depends on the conditions of the economy in which it operates. To better understand how the Texas market for veterinary services is affected by the economy of the Lone Star State, as well as to consider the relationship among veterinary markets in the State, the Texas Veterinary Medical Association and the American Veterinary Medical Association teamed up to perform a workforce analysis of the veterinary profession and the economic impact of veterinarians in Texas. The findings are related in detail in the pages of this report. In surveying the economic conditions in the large and diverse state, economic performance metrics and trend analysis were applied to discover signs of potential economic downturns that could negatively affect Texas veterinarians. The Business Cycle Index (BCI), the Leading Economic Index (LEI), the Gross State Product (GSP), the trade-weighted value of the dollar, and the unemployment rate were combed for clues about where the state’s economy might be headed in the near term. In mid-2008 the LEI dropped considerably, and reached a low in early 2009. Following this contraction, a climb to a 2014 Page 4 of 151 04.21.17 AVMA Assistance Animals: Rights of Access and the Problem of Fraud © Copyright 2017. American Veterinary Medical Association. All rights reserved. high point reversed itself with a slide that appears to flatten in 2016. The corollary BCI indicates that the Texas economy is heading in a positive direction, hinting at no imminent recession. Like the Gross Domestic Product, the GSP is an economic tool used to measure economic health and standard of living. In making a year-to-year comparison, economists check the real GDP, which controls for inflation within the period being examined. As with the nation’s real GDP, the real GSP of Texas declined during the 2009 recession. Between 2010 and 2014, however, the GSP of Texas increased from $1.2 trillion to approximately $1.5 trillion. And though it dropped slightly since the fourth quarter of 2014, it wound up Q4 2016 with a moderate increase from the previous quarter. Cost of living and unemployment were also examined in the study area. It is less expensive to live in Texas than in other largely populated states, and although the unemployment rate increased since 2015, it still registers below 5 percent. DVM: Expense and Recompense As the institution in the state charged with turning out veterinarians to serve the population, Texas A&M University (TAMU) College of Veterinary Medicine and Biomedical Science statistics are evaluated for trend information. During the last three academic years, at least 83 percent of the applicants to TAMU – which the majority of veterinarians practicing in Texas call their alma mater – were in-state applicants. The three-year admission rate for all applicants: 30 out of 100. The average annual tuition and fees for the 30 veterinary medical colleges in the country have more than doubled, from $10,549 in 1999 to $27,096 in 2015. Texas A&M University ranks in the middle with a total cost of obtaining a DVM at $173,070. Tuition and fees generally make up about half the total cost, with other expenses including housing, transportation, school supplies and food. From 2001 through 2016, the mean starting salary for new Texas veterinarians rose from $42,000 to more than $65,000. (These numbers are inclusive of those finding full-time employment as well as those pursuing internships, residencies and advanced education.) Factors speculated to have significant effects on starting salaries are age, gender, location, anticipated work hours per week, and practice type. Similar to the methods used to understand the factors explaining variation in income were applied Page 5 of 151 04.21.17 AVMA Assistance Animals: Rights of Access and the Problem of Fraud © Copyright 2017. American Veterinary Medical Association.