Herfindahl-Hirschman Index
Score
A measure of market concentration that sums the squares of the market shares of all firms in the industry, indicating market competitiveness.
Formula
Sum of the Squares of Individual Market Shares
Example
If there are four firms with shares of 30%, 30%, 20%, and 20%, HHI is (0.3² + 0.3² + 0.2² + 0.2²) = 0.26.