Green can be the new black? Modeling conditions that shape sustainability outcomes in the second-hand clothing market

Second-hand clothing (SHC) markets are increasingly promoted as a circular strategy to reduce the environmental impacts of the fashion industry. However, environmental benefits cannot be assumed, as behavioral and market feedbacks may weaken or reverse expected gains. This paper develops a theoretical framework to examine when a shift from new to SHC fails to reduce environmental impacts and may generate rebound effects. Using a microeconomic model of a representative consumer minimizing wardrobe-related environmental impacts at a given utility level, we incorporate imperfect substitution, moral licensing, and prosumerism enabled by digital resale platforms. The model shows that when substitution is attenuated, moral self-justification relaxes consumption constraints, or resale revenues expand purchasing power, increased reuse may erode or even increase total environmental impacts, depending on parameter configurations. These results highlight critical behavioral and systemic limits of circular economy strategies.