The value of U.S. space activities ranges from the tangible to the intangible, from making scientific discoveries and developing and finding applications for myriad technologies to instilling a sense of national pride. To many people, only some of these values have relevance. Thus federal spending on space projects generates heated debate. To this point, the National Aeronautics and Space Act has emphasized the tangible economic benefits of space activities, even though studies suggest that federal spending for these activities produces no long-term productivity gains for the economy. Given this situation, policymakers might find a better rationale for allocating a space budget by examining the intangible values associated with space activities.
There has long been lively debate in the United States about the attractiveness of space exploration. For example, one of the most controversial issues is the construction of a space station to be built and run by the United States and other space-faring nations. Opponents have called it "Project Vampire" and "Space Station Zero," while proponents have envisioned it as a step toward fulfilling humankind's manifest destiny. Such polar views on the value of space activities have been reflected in Congress, which generally appears divided on the question of funding for these activities. In 1993, for example, a single vote saved the proposed space station.
The difficulty of measuring the intrinsic value of space activities lies at the heart of these funding debates. Like beauty, the value of space exploration is in the eye of the beholder. To some, the value is scientific merit; to others, it is technical accomplishment. To some, space exploration fosters a sense of pride, stirs the spirit, and offers an opportunity for vicarious wandering or wondering. To still others, the value of space exploration is manifested as some tangible economic gain in the quality of life, a means of encouraging young people to study science or engineering, or a source of employment. To others, the value lies in wielding geopolitical influence. To many, it is some combination of these ends. And for many others, exploring space has little or no value.
In this article I briefly examine the legislation establishing the U.S. space program (the National Aeronautics and Space Act and its amendments) as one guide to the program's expected benefits or values. I also draw from public discussion about the space program in order to illustrate some comparatively intangible benefits that seem to have become expected ends of space activities. Then I summarize the economic evidence about the size of these benefits, point out some gaps in space economics research, and conclude with back-of-the-envelope calculations designed to illustrate an approach to thinking about the size of these benefits.
Values implied in NASA legislation and public debate
Values alleged to arise from space activities have expanded throughout the history of the U.S. space program. Amendments to the National Aeronautics and Space Act reflect changing national concerns and interests but have consistently emphasized tangible values. However, the full range of values attributed to publicly funded space projects is obscured by the legislative record. Intangible values have been just as consistently emphasized in public discussion about space activities.
According to the legislation that established the National Aeronautics and Space Administration (NASA) in 1958, the U.S. space program is to expand knowledge about Earth's atmosphere and about outer space, develop and operate space vehicles, preserve the leadership of the United States in inventing and applying aeronautics and space technology, and cooperate with other nations in space projects. These statutorily mandated goals imply a mixture of tangible and intangible values associated with civil space activities.
Amendments to the National Aeronautics and Space Act manifest economic relevance and pragmatism; they have not directly reflected many intangible values that have become expected ends of space activities.
Tangible values predominated in subsequent amendments to the National Aeronautics and Space Act. These amendments read like a time line of the American social agenda. During the 1970s, when energy and environmental concerns dominated that agenda, the amendments broadened the legislated goals of the space program to include research on and demonstration of many new technologies. These included solar heating and cooling technologies, energy-efficient and environmentally benign ground propulsion systems, bioengineering technologies that minimize the effects of human physical disability, advanced automobile technology, and electric and hybrid vehicle technologies.
The Hubble Space Telescope, shown here being deployed by the space shuttle, has scientific objectives, but it also represents intangible value in the form of national prestige
During the 1980s, when the respective roles of government and business were being debated, new amendments encouraged commercial use of space and use by the federal government of commercially provided space services and hardware. Moreover, these new amendments directed those involved in civil space activities to pursue knowledge of the Earth itself (to monitor climate change, for example) and to ensure the preeminence of the United States in industrial manufacturing processes. Like earlier amendments, those of the 1980s manifest economic relevance and pragmatism, as well as concern with social welfare, the environment, and commercial opportunity.
Thus far, Congressional legislation has not directly reflected many of the more intangible values of space activities. Yet values such as inspiring young people to study science, enlarging the human spirit, or instilling a sense of pride have been so emphasized in reports by advisory committees to NASA and by other groups as well that it is as if they are expected ends of space activities. A 1992 report by the National Research Council contends that success in space research could motivate young Americans to choose careers in science, engineering, and technology and that a vigorous space science program could produce information that would interest and enlighten a national audience. Pioneering the Space Frontier, a 1986 report by the presidentially appointed National Commission on Space, asserts that space exploration will remove "terrestrial limits to human aspirations [and] prove of incalculable value to planet Earth and to the future of our species."
The value of intangibles
How "valuable" are the intangible benefits said to be associated with space activities? To date, economics research has been more or less limited to measuring the effect of space expenditures on the economy, using either large econometric models or case studies. The models seek to explain overall macroeconomic growth on the basis of several variables, including federal expenditure on space activities. The case studies generally compare the costs of space program development with the financial return on commercially successful technologies, such as communications satellites.
A recent Congressional Budget Office (CBO) report, Reinventing NASA, summarizes the conclusions of these case studies. One conclusion the CBO reaches is that the short-term economic effects of expenditures on space activities—one possible measure of economic benefit—are no different from those of other federal spending. This determination is not surprising, since it is hard to see why federal spending on space activities should spur the economy more than, say, federally funded highway repairs.
Nor do the case studies find any evidence of long-term productivity gains to the economy from space activities. There may well be productivity gains in some industries (such as in telecommunications as a result of communications satellites), but these positive effects have been due, in large part, to significant industry investment rather than to federal spending. As in the case of short-term effects, the long-term effect of federal spending on space is similar to that of federal spending on other activities. Evidence of long-term economic impact, particularly from federally funded research and development activities associated with space projects, has been negligible.
But what about contributions the space program has made in the way of new products? As the Congressional Budget Office observes, these so-called spin-offs or spillovers have become part of the mythology of space projects. For example, TANG, Velcro, and Teflon—all frequently cited as spin-offs from the Apollo program—were actually developed before the Apollo program began. While some spin-offs have no doubt resulted, it is unclear at best whether they should determine the level of investment to make in space activities. However, the program might have refined these products or brought them to broader attention and hence expanded their commercial markets. Whatever the case, singling out the effect of government influence on the products' markets is difficult. To date, analysts have been unable to answer two questions Concerning spin-offs: What should be the expected probability that space activities will produce a spin-off? By how much should the space budget be augmented to include this likelihood?
Case studies show that the economic-stimulus effects of spending on space activities are no larger than those of spending on other federal projects, and they offer no evidence of long-term productivity gains to the economy from space activities.
More important than answering these questions is ensuring that public policies Include incentives to generate spin-offs when so doing seems appropriate. (Examples of such incentives include cooperative research and development agreements between industry and the federal government; commercialization programs, such as NASA's Earth Observations Commercialization and Applications Program; and other technology transfer activities by which the private sector picks the government technologies upon which to capitalize.) And, because economists think pursuit of spin-off products and services is cheaper and faster if directly funded rather than indirectly funded by way of space projects, the space budget should probably not be increased in the expectation of spillovers.
Future research
A gap in space economics research to date is that no studies have sought to measure the national prestige, geopolitical influence, and vicarious thrill that many associate with space exploration. To ignore these intangible values may be to underestimate significantly the benefits of space activities.
Contingent valuation (CV) methodology offers one possible approach to estimating intangible benefits. It involves the development, administration, and analysis of sophisticated surveys designed to elicit individuals' valuations of difficult-to-measure goods and services for which no market prices exist. CV surveys typically supply information to respondents about the good or service they are being asked to value, but in a way that does not bias the respondents in reporting their valuations.
One way contingent valuation could be applied to space activities is by asking respondents how much extra federal income tax they would be willing to pay each year in order to finance additional space activities. The survey would describe these activities and the scientific knowledge or other benefits expected to be gained from them.
CV methodology is at the frontier of economics research—and, like any frontier research, it is controversial, and not all of the kinks have been worked out yet. If CV surveys are to provide useful information, they must meet many conditions. But the CV approach offers promise for helping to clarify our understanding of the intangible values associated with space activities. It might even shed light on the magnitude of these values as well.
A dilemma and some informal arithmetic
National surveys—informal public opinion polls rather than CV surveys—suggest that the majority of U.S. taxpayers favor reducing spending on space, although not to zero. Americans like having a space program, even though they are not necessarily well informed about the program or what it has already revealed about space. Information collected by the National Science Foundation (NSF) from 1979 until the present indicates that a majority of U.S. citizens do not understand the nature of the solar system or the origins of stars or galaxies. In Science and Engineering Indicators (1993), the NSF concludes, "The American understanding of science is, indeed, rather earthbound." These survey results pose a dilemma to policymakers. How can they determine an appropriate space budget when they cannot reconcile this apparent lack of understanding with the values implicitly attributed to space projects in NASA legislation and public discussion?
Given this gap, space activities often end up being judged by default on their job-creating potential. Indeed, observers claim that the federal space program has become another public works project. To win support for the international space station, NASA periodically generates a map indicating the number of jobs in each congressional district that are associated with the station. Of course, space-related jobs are a cost, not a benefit, to the 179,500,000 taxpayers who are not employed in the federal space program. For this reason, jobs should not be the basis of—the value to pursue in—a space program. But even if they were, a more effective prescription might be to allocate the $14 billion NASA budget by giving $30,000 a year to each of the 433,333 persons believed to be employed in the "space industry" (30,000 x 433,333 = 14 billion).
If job creation is a poor rationale for the U.S. space program, and economic-stimulus effects are no larger for space projects than for other federal programs, policymakers might find guidance for funding NASA in the intangible values that are alluded to in public debate about space activities. The CV approach to measuring these values has not yet been explored. But the following back-of-the envelope arithmetic illustrates the possible implications of CV-like results.
Approximately $1–$2 billion has been at stake each year in recent congressional deliberations on the space budget, which has ranged between $14 billion and $16 billion (in inflation-adjusted dollars) since 1990. Suppose people were asked if $1 billion would better promote the intangible values associated with space activities if the money were instead allocated to nonspace activities. For instance, suppose that $1 billion is to be allocated to a space project undertaken with Russia and other countries of the former Soviet Union and that, like current plans for the international space station, the project is to be used in part as a means of international aid. The effectiveness of this approach to international aid could be tested by asking people if allocating $1 billion to the space project is just as likely to help the countries of the former Soviet Union as an outright doubling of the U.S. budget (currently $1 billion) for direct aid to these countries.
Intangible values attributed to space activities—for example, promoting education—could be measured by asking people if $1 billion would go farther to realize these values if the money were instead allocated to nonspace activities.
A comparison of alternative projects might help to clarify debate about heretofore nebulously described intangible benefits of space activities, such as promoting education. For example, $1 billion would double current federal capital spending for college-level science and engineering programs or double the federal contribution to higher education. Or it would fully fund the college education of some 20,000 students. Would such programs be more effective stimuli to education than space-related activities?
As in the case of space projects, each of these alternative projects could claim its own intangible benefits, spin-offs, or spillovers, such as contributing to national economic health and international competition. What must be articulated in public debate, then, is when and to what extent space activities better meet the same goals.
The NEAR spacecraft, shown in this artist's conception, will collect data about the near-Earth asteroid Eros. Given the space program's scarce resources and possibly conflicting goals, such as science research versus commercial gain, Americans must decide which values associated with space activities they prize most and whether space projects are better suited to realize these values than nonspace projects
Making allocation decisions
Probably no other federal program is expected to meet as many disparate objectives as the civil space program. Together, NASA legislation and the publicly articulated values that have become expected ends of space activities require the program to contribute to space science, understanding of the environment, space vehicle development, and industrial manufacturing, to name but a few enterprises. Nor has any other program been directed to engage in so many activities while at the same time pursuing as many possibly conflicting objectives—science research versus commercial gain, technological innovation versus routine operation, international cooperation versus international preeminence. Americans expect a lot from their space program.
Given high and diverse expectations on the one hand and scarce resources on the other, Americans must decide which of the values associated with space activities they prize most highly and whether space projects or nonspace projects are best suited to realize these values. Such decisions should inform resource allocation both within the space program and between the space program and other public programs. Intangible values might be a key factor in this allocation, but such values have yet to be measured. Doing so might ease the growing tension between demands for accountability in the use of public money and the freedoms granted the space program in the interests of science, technology, and other public gain.
Molly K. Macauley is a senior fellow in the Energy and Natural Resources Division. This article is adapted from a presentation given at "What Is the Value of Space Exploration?" a June 1994 conference sponsored by NASA and the University of Maryland.
A version of this article appeared in print in the January 1995 issue of Resources magazine.
A version of this article appeared in print in the Winter 2015 issue of Resources magazine.
A version of this article appeared in print in the January 1995 issue of Resources magazine.
