Cost and Value in Air and Missile Defense Intercepts
Commentary by Wes Rumbaugh
Published February 13, 2024
With numerous missile defense engagements in the Red Sea, a common framing for news reporting has been the relative cost of the interceptor and the missile or drone it intercepts. These data points are frequently used to illustrate the gap between the two costs, which can lead to the impression that defenses are too expensive to sustain. Multiple media outlets have, for instance, highlighted the U.S. Navy’s use of a $2 million Standard Missile-2 to intercept $2,000 Houthi drones. It makes for a good headline, but the simplistic comparison can be misleading. While analysis of these adverse cost exchange ratios is a tempting and sometimes useful framework, it obscures both the complexity of air and missile defense engagements and the complicated value of air and missile defense.
The Insufficiency of the Cost Exchange Ratio
The “cost exchange ratio” framework is attractive because it is rooted in some truth: air and missile defense interceptors are relatively expensive. Budget documents for FY2024 suggest that U.S. defensive missiles are, overall, roughly twice as expensive as offensive missiles (see table below), when averaging all-up-round unit costs. Highly capable U.S. offensive missiles are also likely more expensive than less sophisticated missiles provided to the Houthis by Iran, though there is some evidence of underestimating the cost of these systems.
This asymmetry is mostly due to the significant technical demands of air and missile defense interceptors. While offensive missiles have gotten more precise, their requirements for precision targeting and maneuvering capability still pale in comparison to defensive interceptors. To successfully intercept an attacking missile, air and missile defense interceptors must possess exceptional speed, range, and sophisticated guidance. This is what makes missile defense “the ultimate precision guidance challenge.”
https://www.csis.org/analysis/cost-and-value-air-and-missile-defense-intercepts
