The State of Space Economic Analyses: Real Questions, Questionable Results

Abstract

Engineers, economists, and lawyers share many common visions and work hard to fulfill the promises and potential for the future of space as an exciting and critical component of society. But each views the world differently, and quite often these different worlds conflict. When visions are translated into policy and operational programs, significant contradictions are present, sending mixed and confusing signals to different shareholders in the space economy. This article will explore such conflicts, which can and should be better understood by all, and will also explore ways of communicating more effectively and working toward common goals in space. Examples include: 1) misusing economic data and methodology to support unsustainable policy options, such as advocating a free market competitive solution in an industry that has high barriers to entry and is largely oligopolistic and monopsonistic; 2) jumping ahead with proposals for expensive and complex engineering projects without exploring either the costs and benefits of those efforts or the legal regime needed to reduce risk and provide incentives; and 3) using economic studies to justify decisions that are made for political, security, or noneconomic goals that are outside of measurable economic statistics. In summary, the article will argue that we need to achieve our common goals about space using the best and most appropriate practices of all theory and disciplines rather than the present “pick-and-choose” approach to force-fit good theory into misleading conclusions and resultant policy choices, which could cause costly mistakes in the long-run.