Disaggregating Household Transport in the MIT EPPA Model

The GTAP version 5 dataset has three transportation sectors. However, household transportation expenditures related to private automobiles are not represented explicitly in the data. We augment the existing GTAP data to separately disaggregate household transportation and explore the implications of this extension in the MIT Emissions Predictions and Policy Analysis (EPPA) model. Climate policy designed to limit carbon emissions affects the fuel cost. Thus, we calculate a change in welfare for a carbon policy scenario with and without a separate household transportation sector. Disaggregating transport into purchased and own-supplied increases the welfare costs of a carbon policy by around 5-20% in different regions. A sensitivity analysis with respect to different values of elasticities of substitution in household transportation is performed. The disaggregation allows us to make better use of the extensive work in the transportation sector to understand substitution possibilities.