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Demand and Dematerialization Impacts of Second‐Hand Markets

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  • Valerie M. Thomas

Abstract

The potential for second‐hand markets to reduce demand for new goods is investigated. Using a variant of an economic model originally developed by Anderson and Ginsburgh, the physical implications for material use are explored. The second‐hand market grows if transaction costs decrease or if product lifetime increases. In this model, growth of the secondhand market reduces demand for new goods if there are waste used goods that can be brought into the market. But if there is not a ready supply of waste used goods, growth of the second‐hand market can increase demand for new goods, thereby increasing material consumption. Moreover, even when second‐hand sales reduce demand for new goods, it is typically not on a one‐for‐one basis. The extent to which the purchase of used goods replaces the purchase of new goods is shown to be an explicit function of the relative value provided by used versus new goods.

Suggested Citation

  • Valerie M. Thomas, 2003. "Demand and Dematerialization Impacts of Second‐Hand Markets," Journal of Industrial Ecology, Yale University, vol. 7(2), pages 65-78, April.
    • Handle: RePEc:bla:inecol:v:7:y:2003:i:2:p:65-78
    DOI: 10.1162/108819803322564352
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    Cited by:

    1. Louise Laumann Kjaer & Daniela C. A. Pigosso & Monia Niero & Nynne Marie Bech & Tim C. McAloone, 2019. "Product/Service‐Systems for a Circular Economy: The Route to Decoupling Economic Growth from Resource Consumption?," Journal of Industrial Ecology, Yale University, vol. 23(1), pages 22-35, February.
    2. Daniel Roos & Rüdiger Hahn, 2019. "Understanding Collaborative Consumption: An Extension of the Theory of Planned Behavior with Value-Based Personal Norms," Journal of Business Ethics, Springer, vol. 158(3), pages 679-697, September.
    3. Kadri G Yilmaz & Sedat Belbag, 2016. "Prediction of Consumer Behavior Regarding Purchasing Remanufactured Products: A Logistics Regression Model," International Journal of Business and Social Research, LAR Center Press, vol. 6(2), pages 1-10, February.
    4. Padmavathy, Chandrasekaran & Swapana, Murali & Paul, Justin, 2019. "Online second-hand shopping motivation – Conceptualization, scale development, and validation," Journal of Retailing and Consumer Services, Elsevier, vol. 51(C), pages 19-32.
    5. Luis Gabriel Carmona & Kai Whiting & Helmut Haberl & Tânia Sousa, 2021. "The use of steel in the United Kingdom's transport sector: A stock–flow–service nexus case study," Journal of Industrial Ecology, Yale University, vol. 25(1), pages 125-143, February.
    6. David Font Vivanco & Jaume Freire‐González & Ray Galvin & Tilman Santarius & Hans Jakob Walnum & Tamar Makov & Serenella Sala, 2022. "Rebound effect and sustainability science: A review," Journal of Industrial Ecology, Yale University, vol. 26(4), pages 1543-1563, August.
    7. Ebo Botchway & Jack McLaughlin & Jan Verpooten & Siegfried Dewitte, 2023. "Loyalty Programs in Second-Hand Markets Stimulate Demand but May Interfere With Supply," RAIS Conference Proceedings 2022-2023 0357, Research Association for Interdisciplinary Studies.
    8. Yulia Hristova, 2019. "The Second-Hand Goods Market: Trends and Challenges," Izvestia Journal of the Union of Scientists - Varna. Economic Sciences Series, Union of Scientists - Varna, Economic Sciences Section, vol. 8(3), pages 62-71, December.
    9. Emmanuelle Reuter, 2022. "Hybrid business models in the sharing economy: The role of business model design for managing the environmental paradox," Business Strategy and the Environment, Wiley Blackwell, vol. 31(2), pages 603-618, February.

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