Collusion in the Indian Tea Industry in the Great Depression: An Analysis of Panel Data

This paper analyzes the effectiveness of the control schemes in the Indian tea industry during the Great Depression, whereby producers attempted to collude by reducing output. Analysis of data from a panel of plantations shows that collusion was effective. We suggest that the system of management of plantations by "managing agents" enhanced the degree of monopoly in the industry, thereby facilitating collusion. The social cohesiveness of expatriate business may have also contributed to the enforcement of collusion.