Thread by @LionnetPierre

I think that I need to discuss launch costs (again), because I keep reading the same bullshit such as: "Over the past decade, launch costs have been lowered by an order of magnitude, thus laying the foundation for the emergence of a new, expansive space economy." 1/9

This assertion from "an integrated strategic and financial services boutique" is wrong because "launch costs" have not been lowered by "an order of magnitude" - furthermore, as all economists know, the price elasticity of launch demand remains an elusive subject. 2/9

So what is launch cost? In its simplest form it is the unit price of a launcher. Once eliminating the Space Shuttle from the series, the trend looks like this. We can see that in average the launcher unit prices have decreased by a factor 2 to 3 in 30 years. 3/9

But is the unit price of a launcher a good indicator? Not really, because other factors apply, such as the launched mass, the fill ratio etc. So a better indicator is the actual launch price per kg (i.e. the unit price divided by the actual launched mass for each launch) 4/9

Also, to make it more or less correct, you have to separate LEO launch from launches to GEO and other orbits, due to a very different load factor. And to avoid a few extreme value points in the series I have kept only the main launchers (worth 95% of total mass launched). 5/9

In average the real cost to launch to GEO has dropped by 30% in 3 decades, and the real price to launch to LEO has dropped by 50% in 3 decades. Of course a lot of this due to the roll-out of Falcon 9 and its aggressive pricing policy. 6/9

This is already impressive, but is nowhere close to a factor 10 decrease. Even when considering SpaceX most aggressive pricing strategies (i.e. not for NASA, NRO and DoD), the best price/kg to LEO I could measure with Falcon 9 was 4k$/kg - but in average F9 fares at >10k$/kg 7/9

So is this cheap? Well yes, it is getting cheaper. But has it changed the volume of demand? Not yet (except SpaceX's own demand to launch Starlink - see 2020/21). And this is the big issue of launch demand, it is not very elastic and reacts poorly to price variations. 8/9

So how low must launch prices go to actually really make a difference in launch demand? 9/9