Find the Herfindahl-Hirschman Index (HHI), the standard measure of market concentration, from the market shares of the firms in a market.
How it works
HHI is the sum of each firm’s squared market share: HHI = Σ (market share %)². Four firms holding 40%, 30%, 20%, and 10% of a market give an HHI of 3,000.
What this does not include
This calculates the index itself — it doesn’t interpret whether a resulting HHI value would raise antitrust concerns for a specific proposed merger, which depends on regulatory thresholds and context this calculator doesn’t apply.
How to use this calculator
- Enter each firm’s market share as a percentage (up to five firms).
A worked example
Four firms with market shares 40%, 30%, 20%, 10%: HHI = 40²+30²+20²+10² = 3,000 — a moderately concentrated market.
Four firms each with an equal 25% share: HHI = 2,500 — a lower HHI than the uneven distribution above, despite the same number of firms and total market coverage.
What the variables mean
| Variable | Meaning |
|---|---|
| Market shares (s1–s5) | Each firm’s percentage share of the market |
Edge cases worth knowing
A more uneven distribution produces a higher HHI than an even one, even with the same number of competitors — HHI penalizes dominance by a few large players more than it penalizes having many players overall.
US antitrust guidelines generally treat an HHI above 2,500 as a highly concentrated market — both examples above sit right around that commonly cited threshold.
Why square the market shares instead of just adding them?
Squaring gives disproportionately more weight to larger firms, so a market dominated by one big player produces a much higher HHI than a market with the same total share spread evenly across many firms.
What HHI range indicates high market concentration?
US antitrust guidelines commonly treat an HHI above 2,500 as highly concentrated, though the exact thresholds and their application depend on the specific regulatory framework and market context.
What’s the minimum possible HHI?
It approaches zero as market share spreads across an increasing number of equally small firms — a market with many tiny competitors has a very low HHI.
