What does HH mean in economics?
What does HH mean in economics?
Herfindahl-Hirschman index
Herfindahl-Hirschman index (HHI), also called HH index, in economics and finance, a measure of the competitiveness of an industry in terms of the market concentration of its participants.
What is HH market concentration index?
The term “HHI” means the Herfindahl–Hirschman Index, a commonly accepted measure of market concentration. The HHI is calculated by squaring the market share of each firm competing in the market and then summing the resulting numbers. The HHI takes into account the relative size distribution of the firms in a market.
How do I calculate the Herfindahl index?
You can calculate Herfindahl Index by squaring the market share for each firm (up to 50 firms) and then adding the squares. In a perfectly competitive market, HHI should approach zero.
What is the Herfindahl-Hirschman Index calculator?
HHI calculator
The HHI calculator is a tool that easily computes the value of the Herfindahl-Hirschman Index. The HHI Index measures the market concentration (not capitalisation) of a particular industry and is used to determine market competitiveness.
How do you calculate cr4?
Add together the total sales for each of the four largest firms in your selected industry. Then divide that sum by the total sales of the industry. Convert that result to a percentage, and that percentage value is the four-firm concentration ratio.
What is the 4 firm concentration ratio?
A four-firm concentration ratio is one way of measuring the extent of competition in a market. It is calculated by adding the market shares—that is, the percentage of total sales—of the four largest firms in the market.
What is a monopoly index?
The closer a market is to a monopoly, the higher the market’s concentration (and the lower its competition). If, for example, there were only one firm in an industry, that firm would have 100% market share, and the Herfindahl-Hirschman Index (HHI) would equal 10,000, indicating a monopoly.
Which industry has the highest Herfindahl index?
monopoly
The largest HHI possible is the case of monopoly, where one firm has 100% of the market; the index is 1002, or 10,000. An industry with two firms, each with 50% of total output, has an HHI of 5,000 (502 + 502). In an industry with 10,000 firms that have 0.01% of the market each, the HHI is 1.
What is the Herfindahl Index used for?
The Herfindahl-Hirschman Index (HHI) is a common measure of market concentration and is used to determine market competitiveness, often pre- and post-M&A transactions.
What does HHI stand for?
HHI
| Acronym | Definition |
|---|---|
| HHI | Hilton Head Island |
| HHI | Hardware and Home Improvement (various organizations) |
| HHI | Herfindahl-Hirschman Index (measure of market concentration) |
| HHI | Household Income |
What is the value of h in a perfectly competitive market?
and H has decreased. Under perfect competition, there are an infinity of firms in the market, each with an infinitesimal market share. What is the value of H in a perfectly competitive market? When there are infinite firms, Si => 0, so H =>0 as well.
What is CR4?
For example, the four-firm concentration ratio (CR4) refers to the market share of the four largest firms. Equal to the sum of the squares of the market shares for the largest 50 firms in the industry. The higher the index, the more concentrated the industry.
