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 ?
We have examined, in this paper, numerical behavior of granularity adjustment, Gini index and Herfindahl-Hirschman index in several types of portfolios and we have studied its robustness to model parameters.
Research on concentration in Lithuanian banking sector is based on the most frequently used concentration measures --the Herfindahl-Hirschman index and the k bank concentration ratio.
We believe that the inverse relationship between the Herfindahl-Hirschman index and the dependent variable suggests that banks in concentrated systems are more likely to be considered too big to fail.
The Herfindahl-Hirschman Index is one measure of relative share.
The calculation they use to determine this is called the Herfindahl-Hirschman Index (HHI)--HHI is calculated by multiplying the market shares of all companies in a sector by 100 (70% becomes 70), squaring each of those, and then adding them all together.
In the second stage of our regression methodology, we estimate how volatility in each market changes over time in relation to changes in the level of concentration, as measured by the Herfindahl-Hirschman Index (HHI) of concentration.
The second key market characteristic was community hospital concentration, measured by the Herfindahl-Hirschman Index (HHI) from AHA admissions data (U.
RFA noted that the FTC used the Herfindahl-Hirschman Index (HHI) to calculate market concentration in several ways, resulting in findings ranging from 499 to 1259.
This is done by using the Herfindahl-Hirschman Index (HHI; see sidebar, page 64), which is calculated by squaring the percentage of the market share of each company in a specific industry, then summing the squares.
Under the merger guidelines, determination of monopoly power requires a two-step process: The market is defined and then a formula which uses market-share data, the Herfindahl-Hirschman Index, is used to determine market concentration.
Since the Central Statistical Service has now published official measures of concentration for South Africa - including popular measures like the four-firm concentration ratio (CR4) and the Herfindahl-Hirschman index (HHI) - a revisit to the concentration-profits monopoly vs.