An argon expanding cascaded arc plasma, with small amounts (0-10 vol.%) of hydrogen added to the flow, is investigated by means of Thomson-Rayleigh scattering and optical emission spectroscopy. The results, especially the electron density behaviour as a function of the distance from the onset of the expansion, are interpreted by comparison with results of a quasi one-dimensional model. The associative charge exchange reaction between Ar+ ions and H2 molecules plays a dominant role in the model. Assuming that H2 molecules from the wall enter the plasma in the shock region, the large ionization loss can be explained. Good agreement between model and experiment is found for the electron and neutral density and the electron temperature behaviour. This makes plausible the existence of a recirculation flow inside the vacuum vessel, which transports wall-associated hydrogen molecules towards the plasma.