Diagnostic Lab Generates Impressive ROI

The diagnostic lab's returns to taxpayers and livestock producers far exceeds operating expenses, according to the economic study. ( Iowa State University )

A case study on the economic value of the Iowa State University Veterinary Diagnostic Lab (ISUVDL) shows an eight-to-one return on investment, and that’s just during normal years. In years when health emergencies such as avian influenza emerge, the ROI jumps to around 31 to one.

Those figures come from a case study recently published in the peer-reviewed journal Preventive Veterinary Medicine.

According to the analysis, The ISUVDL receives $4 million annually in state appropriation for operating purposes, while generating $31.79 million in state taxes in normal years and the $124.15 million in state taxes in an animal health emergency. That adds up to a 795% ROI in normal years and 3,104% in years with an outbreak emergency.

That ROI is based on just the tax dollars invested and tax dollars generated, while benefits to the livestock industry create additional value. The authors based their analysis on figures from 2014, when livestock production contributed about $13 billion to Iowa’s gross domestic product. Using economic contribution analysis, they determined that absence of the ISUVDL would have reduced that economic output by 6.64% during a normal year, and almost 26% in an animal health emergency year.

The journal article titled, “Economic impact of university veterinary diagnostic laboratories: A case study” is available online.