Herfindahl-Hirschman Index

(noun)

A measure of the size of firms in relation to the industry and an indicator of the amount of competition among them.

Related Terms

Examples of Herfindahl-Hirschman Index in the following topics:

  • Market Power

    • Measurement of market power is often accomplished with concentration ratios or the Herfindahl-Hirschman Index (HHI).
    • The Herfindahl-Hirschman Index (HHI) is a measure of the size of firms in relation to the industry, and an indicator of the amount of competition among them.

  • Regulation and Antitrust Policy

    • These agencies then review the proposed merger by defining what the market is, and then determining the market concentration using the Herfindahl-Hirschman Index and each company's market share.

  • Calculating Market Share

    • The Herfindahl index is a measure of the size of firms in relation to the industry and an indicator of the amount of competition among them.
    • Decreases in the Herfindahl index indicate a loss of pricing power and an increase in competition, and vice versa.