# Herfindahl-Hirschman Index

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## Herfindahl-Hirschman Index (HHI)

A measure of market concentration, it depends on the number of firms and their size relative to the market. It is calculated by summing up the squares of market shares of each firm. For example, a market where the HHI comes to more than 1800 will be considered a concentrated market. Mergers or acquisitions that change the HHI by more than 100 points in a concentrated market may raise antitrust concerns within the Department of Justice.

## Herfindahl-Hirschman Index

An index of market concentration the U.S. Department of Justice uses to determine whether a monopoly is forming. The scale goes from zero to 10,000, with 10,000 indicating that a single company controls 100% of the market share in a given industry. An HHI of less than 1000 indicates a market with little concentration, which the Justice Department prefers. Any merger or acquisition leading to an increase of more than 100 when the HHI was previously greater than 1,800 may lead to antitrust action against the company involved.
References in periodicals archive ?
Analyzing correlations between the Boone (2008) indicator and other competition characteristics, such as the Panzar and Rosse (1987) H-Statistic, government ownership of banks, the Financial Freedom Index, and the Herfindahl Hirschman index that captures deposit market concentration, also suggest that the indicator is linked intuitively with competition.
Trai has approved the Herfindahl Hirschman Index ( HHI) for measuring the level of competition or market concentration in a state.
8%;- The Herfindahl Hirschman index points to moderate market concentration;- The number of insurance companies remained unchanged (28) from Q2 2012, while total employment edged up by 0.
Department of Justice: The Herfindahl Hirschman Index.
4% Notes: (a) NGH\$/NE = Non-Governmental Hospital Payments per Non-Elder (B) FEHBP = Federal Employee Health Benefit Program (c) Old/Young = Ratio of those age 20-34 to those age 45-64 (d) Hospital HHI = Hospital Herfindahl Hirschman Index PANEL B: 1990-2000 GROWTH RATE (e) Mean Median Std.

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