Herfindahl Index Calculator
Calculate the Herfindahl-Hirschman Index (HHI) to measure market concentration by summing squared market shares.
HHI
3,000.00
HHI vs Firm 1 Market Share (%)
Formula
## How to Calculate the Herfindahl-Hirschman Index ### Formula **HHI = Sum of (si)^2** where si is each firm's market share as a percentage. HHI ranges from near 0 (highly competitive) to 10,000 (monopoly with 100% share). US DOJ guidelines: HHI < 1,500 = unconcentrated, 1,500-2,500 = moderately concentrated, > 2,500 = highly concentrated.
Exemplo Resolvido
Four firms with market shares: 40%, 30%, 20%, 10%.
- 01HHI = 40^2 + 30^2 + 20^2 + 10^2
- 02= 1600 + 900 + 400 + 100 = 3000
- 03HHI = 3000 (highly concentrated)
- 04Normalized = 3000 / 10000 = 0.30
- 05Equivalent equal-size firms = 10000/3000 ≈ 3.33
Perguntas Frequentes
What HHI level triggers antitrust review?
The US DOJ considers markets with HHI above 2,500 as highly concentrated. Mergers that increase HHI by more than 200 points in concentrated markets are presumed to enhance market power and face scrutiny.
What are equivalent firms?
The reciprocal of the normalized HHI (or 10000/HHI) gives the number of equal-size firms that would produce the same HHI. An HHI of 3000 is equivalent to about 3.3 equal-size firms.
Can HHI be used outside antitrust?
Yes. HHI measures concentration in any context: portfolio diversification (concentration across assets), ecological diversity (species abundance), market research (brand concentration), and voting power analysis.
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