Monday, January 30, 2012

Market concentration: the Herfindahl-Hirschman Index calculator

"Since 1982, the U.S. Department of Justice, the Federal Trade Commission, and state attorneys general have used the Herfindahl-Hirschman Index (HHI) to measure market concentration for purposes of antitrust enforcement. The HHI of a market is calculated by summing the squares of the percentage market shares held by the respective firms. For example, an industry consisting of two firms with market shares of 70% and 30% has an HHI of 70²+30², or 5800.

"According to the DOJ-FTC 2010 Horizontal Merger Guidelines, the agencies will regard a market in which the post-merger HHI is below 1500 as 'unconcentrated,' between 1500 and 2500 as 'moderately concentrated,' and above 2500 as 'highly concentrated.'"

See the tool HERE.

1 comment:

Noiln said...

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