Free Herfindahl Index Calculator
Calculate the Herfindahl-Hirschman Index (HHI) to measure market concentration by summing squared market shares.
HHI
3,000.00
Normalized HHI (0-1)0.300000
Equivalent Firms3.33
Total Market Share (%)100.00
HHI vs Firm 1 Market Share (%)
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.
Example Calculation
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
Frequently Asked Questions
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