Hey Mars settlement fans: I modeled the economics of starting a city on Mars, including the use of Mars resources to build over a few decades, and including income to offset costs. The model indicates much cheaper than @elonmusk estimated here:
https://twitter.com/elonmusk/status/1159964499975135232?s=20.../1
2/ For this model, I used actual data from the US Census bureau, the bureau of labor statistics, etc etc, assuming most segments of the economy will be built on Mars. A portion of the residents will work in the services sector (NAICS 51) just as in the US economy, so...
3/ ...exports from those workers will be "massless", easy to transport back to Earth. Including only those exports, the settlement can completely pay for ongoing imports of materials from Earth within a couple decades, thus keeping total cost low...
4/ I was surprised. Using Elon's transportation cost estimate and actual all-sectors economics data, the total Elon would need to outlay looks quite low. This is a zero-interest J-curve (i.e., the loan covered by Elon). It goes no lower than $2.5B at the deepest point. 
5/ Certain segments of our current economy would be totally omitted (e.g., leather and wood) and the new costs for making air & water plus doing indoor agriculture are not that large compared to the total economy, thus easily absorbed.
6/ The biggest challenge was to estimate the number of unique items manufactured in a closed (self-sustaining) supply chain. Do we make 100,000 unique electronic components? What capital assets are needed to make them? Can we redesign everything to use fewer unique parts?
7/ Some researchers I know are working on reducing the number of unique parts for an off-planet economy. The extreme limit is a "general self-replicator" where *one* machine is able to make all of itself. This new model avoids fanciful extremes, so...
8/ ...it only assumes a modest reduction in supply chain breadth. Instead of 1000 types of bolts, Mars might start out by making only 100 types of bolts and design everything for just that. But this question is IMO the biggest source of uncertainty in the model.
9/ Everybody who knows me knows I am more of a cislunar person: put industry in cislunar space using lunar and asteroid resources to save the Earth (and get revenue servicing Mars transports). This modeling result surprised me. I no longer think settling Mars will be that hard.
10/10 I plan to present this model on Friday at the ESA's Space Based Solar Power workshop as part of a discussion on how we can use space resources to build clean energy for Earth.
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