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Topic: Herfindahl index

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Market dominance strategies

Concentration ratio

Oligopoly

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	Herfindahl index - Wikipedia, the free encyclopedia
		In economics, the Herfindahl index is a measure of the size of firms in relationship to the industry and an indicator of the amount of competition among them.
		The major benefit of the Herfindahl index in relationship to such measures as the concentration ratio is that it gives more weight to larger firms.
		The United States uses the Herfindahl index to determine whether mergers are equitable to society; increases of over 0.0100 points generally provoke scrutiny, although this varies from case to case.
	en.wikipedia.org /wiki/Herfindahl_index (894 words)

	H-index - Wikipedia, the free encyclopedia
		The h-index is an index suggested by Jorge E. Hirsch to quantify the scientific productivity of physicists and other scientists based on their publication record.
		The index is calculated based on the distribution of citations received by a given researcher's publications.
		[1] The index is designed to improve upon simple measures such as the total number of citations or publications, to distinguish truly influential physicists from those who simply publish many papers; the index is also less sensitive to single papers that have many citations.
	en.wikipedia.org /wiki/H_index_(physics) (317 words)

	[No title]
		The Herfindahl index for this industry is: Industry X is comprised of five firms, the market share for each firm is as follows: 20, 20, 20, 20, and 20.
		The Herfindahl index for this industry is: Industry X is comprised of five firms, the market share for each firm is as follows: 30, 15, 15, 20, and 20.
		The Herfindahl index for this industry is: Industry X is comprised of four firms, the market share for each firm is as follows: 18, 22, 28 and 10.
	www.tc.cc.tx.us /~srivas/mtwelveb.doc (170 words)

	inequality
		The resultant index can be interpreted with reference to an inequality base where one unit owns all and the rest nothing.
		This inequality index also integrates the measurement of inequality, concentration, and diversification into one system, where diversification is measured as the inverse of concentration.
		The Herfindahl index and the Tideman-Hall index take both N and I into account with weighted sums of the units.
	www.foldvary.net /works/ineq.html (2247 words)

	Bibliometric Indicators for National Systems of Innovation
		The Herfindahl index - which being a single number, makes it possible to assess change in concentration over time.
		This index is calculated by summing the squares of each institution's share of the sector's publication (it's maximum value is one).
		At this minimum, the Herfindahl index would equal 1/n where n is the number of institutions.
	www.sussex.ac.uk /Users/sylvank/hickskatz/concentr.html (321 words)

	Competitive Balance in Football: Trends and Effects postgraduate programmes undergraduate football governance research ...
		Given that the index has not been designed with drawn matches in mind, it is not the most appropriate index to measure competitive balance in football leagues where the number of wins per season varies.
		A major advantage of this index is that it is intuitively easy to understand - if the allocation of points in the league were equal between clubs, for a league with 20 clubs the index would equal 0.25: anything greater than this would indicate a degree of imbalance between the top 5 and the rest.
		In a standard industry context, the Herfindahl index lies between 0 (with an infinite number of firms) and 1 (pure monopoly): however, in football, restrictions on the number of teams in a league and constraints imposed by the points scoring system mean the index lies well within this range.
	www.football-research.org /papers/competitivebalance-paper.htm (3764 words)

	Oligopoly Watch
		They are the Concentration Ratio and the Herfindahl Index.
		The H index is a far more precise tool for measuring concentration.
		If a merger or acquisition increases the index by 100 or more or pushes the overall index over 1,000, it is likelier to attract FTC scrutiny.
	www.oligopolywatch.com /2003/08/15.html (448 words)

	[No title]
		A major drawback of this index, however, is that it is not suitable for international comparisons because it is very sensitive to the level of aggregation of regional data (an illustration of this property is given in the Appendix).
		The methodology underlying the construction of this index is detailed in the Appendix but, in its essential term, the AGC index is constructed by transforming the Herfindahl index as to take into account within-and between-country differences in the size of regions.
		A major drawback of the EG index is that it is not suitable for international comparisons because it is very sensitive to the level of aggregation of regional data.
	www.oecd.org /dataoecd/43/0/15179780.doc (2558 words)

	[No title]
		If there are 100 equal sized firms in an industry, the Herfindahl index would equal 100.
		The Justice Department argues that an industry in which the Herfindahl index is less than 1,000 is highly competitive.
		A Herfindahl index between 1,000 and 1,800 indicates that an industry is moderately competitive.
	www.oswego.edu /~economic/eco101/chap13.ppt (269 words)

	FATHOM: Sidebars (Site not responding. Last check: 2007-10-21)
		If the state has an extremely polyethnic character in which every ethno-national group is vanishingly small, i.e., where each person represents their own ethno-national group, the HHi tends toward 0.
		The method of measurement used for this index allows each group's share of the population to "determine its own weight," so its share is multiplied by its own share.
		Using the HHi index, a group's weighted share is determined by its own weight, i.e., in the case of the Flemings, by multiplying.59 by.59 =.348.
	www.fathom.com /feature/35584/1632_table2.html (303 words)

	[No title]
		If the index is at least 1,000 but less than 1,800, the industry is a weak oligopoly (weak power to affect the price).
		In the second industry, the Herfindahl Index is 3,000 (2,500+100+100+100+100+100 as 50 squared equals 2,500 and 10 squared equals 100).
		Test Your Understanding For breweries, the Herfindahl Index was 310 in 1958, 690 in 1968, 1,292 in 1978, 1,938 in 1984, and 2,594 in 1992.
	daphne.palomar.edu /llee/ChapC21.doc (6454 words)

	The Impact of Access Regulation on Health Insurance Market Structure
		Guaranteed issue of some but not all products drove a modest increase in the Herfindahl index (with weak significance), suggesting that even modest guaranteed issue reforms may force some concentration of markets via the exit of some small insurers.
		Similarly, guaranteed renewal forced an increase in both the Herfindahl index (and, with very weak significance, the market share held by the largest insurers in the state).
		The highly significant increase in the Herfindahl index, in particular, suggests that preexisting condition exclusions favor somewhat larger firms over very small firms.
	aspe.hhs.gov /health/Reports/impact/sect04.html (1601 words)

	Industrial Diversification
		The index of industrial concentration we use is the Herfindahl Index.
		The index for each CMA for any given year is calculated using the number of workers employed in sixteen (16) different industries.
		For any CMA, this index takes a maximum value of 1 if all employment is concentrated in one industry and a minimum value of.0625 when employment is perfectly diversified, that is, equally distributed across all 16 industries in the CMA.
	www.laurentian.ca /INORD/10_00/Diversification_1.htm (911 words)

	BurtLaw's Law and Economics
		[more] Herfindahl first used the index in 1952 at the University of Chicago to determine economic concentration in the steel industry.
		There have been numerous law review articles written about the index, and it is now widely used throughout the world by economists -- for example, just recently in India to determine the degree of competition in the markets in branded biscuits and branded bread, both popular Indian foods.
		I know the answer to the first question because the "Herfindahl" in the HHI is my late mom's late cousin, Orris Herfindahl, who died trekking in Nepal.
	www.lawandeverythingelse.com /id26.htm (965 words)

	Nat' Academies Press, A Shared Destiny: Community Effects of Uninsurance (2003)
		To measure the relative concentration of uninsured discharges we calculated two Herfindahl indexes, which equal the sum of the squares of the market shares.
		We then divided the Herfindahl index for uninsured discharges by the Herfindahl index for all discharges.
		We use the HCFA wage index as a measure of cost and population density as a measure of overall demand adjusted for geographic convenience (Porell and Adams, 1995).
	www.nap.edu /books/0309087260/html/227.html (779 words)

	Herfindahl-Hirschman Index (HHI) 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.
		Republication of all or part of this document, including the software elements thereof, in any form, including electronic, without written consent of the author is prohibited.
	www.unclaw.com /chin/teaching/antitrust/herfindahl.htm (211 words)

	DLI - Business Integrated Database
		The database only has four elements: the year, the SIC-E (four digit level), the Herfindahl Index at the SCG 4 digit level, and the Herfindahl Index at the SCG 6 digit level.
		The Herfindahl Index is a plant product specialization index.
		A share of a particular SGC is calculated for each establishment by dividing the production of the SGC by the value of all goods manufactured by the establishment.
	www.statcan.ca /english/Dli/Data/Ftp/bid.htm (102 words)

	[No title]
		If the five firms in an industry have 60%, 20%, 10%, 5%, and 5% of the market revenues respectively, a) the Herfindahl index would be 4,125 and the concentration ratio would be 95%.
		b) the Herfindahl index would be 4,150 and the concentration ratio would be 95%.
		c) the Herfindahl index would be 4,125 and the concentration ratio would be 100%.
	www.gc.peachnet.edu /business/mryan/1100/1100_Rev3.doc (491 words)

	III. How Do Courts and Agencies Evaluate Market Power?
		The Lerner Index is a method that theoretically could be used to determine whether firms possess market power, but as discussed below, it has proven impractical to apply to transactions.
		The Lerner Index, however, has not proved particularly useful to courts or agencies because it is often difficult to apply to assess either current or likely future market power.
		As Landes and Posner explain, the Lerner Index is the reciprocal of the demand elasticity facing the firm at its own profit-maximizing level of output.
	www.ftc.gov /opp/jointvent/classic3.htm (1962 words)

	handout 7
		The Herfindahl index is calculated by summing the squares of the individual market shares of all the participants.
		The agency divides the spectrum of market concentration as measured by the Herfindahl index into three regions that can be broadly characterized as unconcentrated (H < 1000), moderately concentrated (1000 < H < 1800), and highly concentrated (H above 1800).
		Mergers producing an increase in the H of less than 100 points in moderately concentrated markets post-merger are unlikely to have adverse competitive effects and ordinarily the agency will approve such mergers (i.e., the Justice Department will approve the merger of two little firms).
	www.tricity.wsu.edu /~achaudh/H7mgecon.htm (2614 words)

	[No title]
		The Herfindahl index is notable because Visa has such dominance of the industry, which is not reflected by the concentration ratio.
		This would be a 99% concentration ratio, but a 3175 Herfindahl Index.
		Should all these be taken into effect, the concentration ratios and Herfindahl index would be much less.
	www.innogize.com /papers/creditindustry.html (928 words)

	NCPA - Policy Report 259 - Insuring the Uninsured through Association Health Plans
		The Herfindahl-Hirshman index is simple to calculate and is often used as a yardstick to indicate the competitiveness of a market (O'Sullivan and Sheffrin, 2001; Boyes and Melvin, 2002; Baye, 2000).
		As a tool for assessing the degree of market concentration, the Herfindahl-Hirshman Index (HHI) is a function of the number of firms in a market and their respective market shares (Gilligan, 2002; Hirschey and Pappas, 2000; Katz and Rosen, 1991).
		Exhibit I shows how the index is used to judge whether the firms are highly concentrated in a given industry.
	www.ncpa.org /pub/st/st259/st259b.html (2408 words)

	e120hw5 (Site not responding. Last check: 2007-10-21)
		In general, industries with high values of the Herfindahl Index are judged to be more concentrated (to have greater ability to raise price and earn economic profits).
		In 1982, the Justice Department established merger guidelines based on the Herfindahl Index.
		The Herfindahl Index is based on sales of domestically produced output.
	www.k-state.edu /economics/jfrjr/e120hw5.htm (249 words)

	mic_ch14.html (Site not responding. Last check: 2007-10-21)
		Remember how the Herfindahl Index is calculated: it is the addition of the market shares of each firm - squared.
		Any merger in a market where the Herfindahl Index is greater than 2000 is questioned.
		The Herfindahl Index is the addition of the market shares of all the firms in the industry - squared.
	carbon.cudenver.edu /~eherr/mic_ch14.html (1583 words)

	CHAPTER 2 (Site not responding. Last check: 2007-10-21)
		Herfindahl index -- another method used by economists to classify how competitive an industry is
		The index is important since it is used as a marker by the Justice Department for allowing or disallowing mergers to take place.
		If the index is less than 1,000, the industry is considered competitive thus allowing the merger to take place.
	www.hcc.cc.il.us /staff/BillM/fall04/sgch13e.html (2698 words)

	Untitled Document (Site not responding. Last check: 2007-10-21)
		A measure of the degree of concentration in in a market that takes into account the total number of companies in the market and their relative size (share of the market).
		The Herfindahl index is the sum of the squared shares for all categories.
		When it is used to measure industrial concentration in the 16 major industry groups, the Herfindahl Index is calculated by dividing the number of workers in each industry by the total number of workers to get the 16 industry shares.
	www.laurentian.ca /INORD/Herfindal.htm (103 words)

	MONOPOLIZATION
		These are generally preferred to concentration ratios since they are influenced by the size distribution of firms in a way that simple CR’s are not.
		The Herfindahl Index is then the sum of the squared shares:
		This index is zero in perfect competition and is maximized by monopoly pricing.
	hubcap.clemson.edu /~sauerr/classes/309/Monopolization.htm (804 words)

	Week 8 Practice Questions (Site not responding. Last check: 2007-10-21)
		(a) The pre-merger Herfindahl-Hirschman Index must be between 1000 and 1800 if a merger that increases the index by 90 points will be challenged.
		It only matters what the increase in the index will be as a result of the merger.
		A merger between a paper producer and a book publisher is an example of (a) a vertical merger.
	darkwing.uoregon.edu /~bruceb/week8ps.html (586 words)

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