The role of allocation of retail trade margins across household segments on their carbon footprint calculation

Abstract

The homogeneity assumption, inherent to input–output (IO) analysis, implies that every euro spent within one product group is assigned the same environmental burden. We address this assumption applied to price conversion of household expenditures from purchasers’ to basic prices when the carbon footprint of consumption is calculated for specific household segments by linking the IO table and micro-level household consumption data. We perform a sensitivity analysis of the different allocations of the retail trade margin of two consumption groups (Food and Goods) across household expenditure deciles. While a differently allocated retail trade margin influences the carbon footprint of household segments, it does not challenge the general finding that households with higher expenditures are responsible for higher footprints. This finding holds also for different emission intensities of retail trade margins.