Herfindahl Index Calculator: Measure Market Concentration Easily
The Herfindahl-Hirschman Index (HHI) adds the squares of each firm’s market-share percentage to show how concentrated a market is; scores above 2,500 flag high concentration under U.S. antitrust guidelines (DOJ, 2023).
Herfindahl Index Calculator
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How to use the tool
Enter market shares: Type every firm’s share as a whole number (no % sign) separated by spaces. Example inputs: 55 25 15 5 | 12 18 20 25 25
Check totals: The figures do not have to sum to 100, but each must sit between 0 and 100.
Click “Calculate”: The tool squares each share, sums the results, and returns the HHI.
Read the colour cue: Green border = valid input; red border = error.
U.S. DOJ flags markets >2 500 as “highly concentrated” (DOJ Merger Guidelines, 2023).
EU considers an HHI increase of >150 in already concentrated markets as problematic (EC Guidelines, 2010).
An HHI drop of 100 points can signal entry of a viable competitor (Baker & Shapiro, 2019).
FAQ
What is the Herfindahl-Hirschman Index?
The HHI is a concentration metric that sums the squares of all firms’ market-share percentages, giving greater weight to larger firms (OECD Glossary, 2022).
How do regulators read HHI scores?
U.S. antitrust agencies treat scores <1 500 as unconcentrated, 1 500–2 500 as moderate, and >2 500 as high concentration (DOJ, 2023).
Why square the market shares?
Squaring magnifies big players’ influence, aligning the index with monopoly power theory (“Squaring reflects the disproportionate impact of large firms,” DOJ Tech Note, 2021).
Can HHI ever exceed 10 000?
No. A single firm with 100 % share yields 10 000; additional firms lower the total (EC Guidelines, 2010).
How do I convert revenue to market share?
Divide each firm’s revenue by total industry revenue, multiply by 100, then enter those percentages (Investopedia, 2024).
How often should I recalculate HHI?
Quarterly in dynamic sectors like tech; annually in stable utilities (PwC Industry Monitor, 2023).
Does a lower HHI guarantee consumer welfare?
Not always; product differentiation and innovation also affect welfare (Baker & Shapiro, 2019).
How does HHI help merger analysis?
Regulators compare pre- and post-merger HHIs; an increase over 200 in a concentrated market raises red flags (DOJ, 2023).
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