Space Economics

This course applies foundational economic tools—such as cost-benefit analysis, market failure theory, externalities, and incentive design—to the unique challenges and opportunities of the space domain. Students will explore how space differs from terrestrial markets, characterized by non-rival commons, high fixed and low marginal costs, and complex public-private interdependencies. The course includes deep dives into key sectors such as launch economics, orbital infrastructure and debris management, commercial low Earth orbit (LEO) development, remote sensing, cislunar and lunar surface economies, space-based solar power, and space nuclear power—each analyzed through the lens of market structure, risk allocation, and policy design.

Global competition and industrial policy are examined through comparative case studies of U.S. and Chinese lunar initiatives, alongside historical analogues from maritime and aviation economics to illuminate patterns of infrastructure evolution and regulatory adaptation. Students will also engage with decision-making frameworks including real options, portfolio theory, and uncertainty modeling to assess long timelines, ambiguous returns, and national interest trade-offs. Current affairs modules address emerging issues such as Mars Sample Return economics, debris regulation gridlock, and the role of AI and inflation in shaping the future space economy.