15 February 2011

Second Hand Clothes: The Data Edition

Dean Karlan makes a very good criticism of critics by pointing out that there is not sufficient data when looking at donated shirts.

However, we do know a think or two about secondhand clothing (SHC).  I decided to look around to see what I could find in terms of performed studies. In a study conducted in 2005, Oxfam looked at existing data, West Africa and Senegal to determine the impact of SHC on the continent. The study concluded that:

  • SHC trade benefits the consumers, especially poorer consumers in countries with lower purchasing power.
  • The SHC trade has shifted consumption away from locally tailored goods.
  • It creates hundreds of thousands of jobs.
  • It has had a undermined the growth/development of local textiles.
  • It displaces new exports from third countries (ie. Asia) and leads to less jobs in those nations (due to no need for African countries to import newer goods from Asia).
  • SHC may have contributed to demise of textile industry, but absence will not bring it back due to cheaper exports from Asian nations.
The paper concludes with a set of recommendations that all surround the idea of working with the existing SHC sector in order to increase access to clothing in rural communities and increase the efficiency of the trade.

The question is, what happens when free goods are introduced? With so many jobs created and dependent upon SHC trade, will free clothing harm the industry or provide items to those who would not otherwise participate in the trade?