# HHI Calculator (Herfindahl–Hirschman Index)

URL: https://speedycalculator.com/calculators/finance/hhi/
Last updated: 2026-10-25

> The HHI calculator measures market concentration by adding up the squares of the market shares of every firm, and classifies the market as unconcentrated, moderately concentrated or highly concentrated using the U.S. merger guidelines.

## Inputs

- Market shares of each firm (%)
- Merging firm A share (optional)
- Merging firm B share (optional)

## Results

- Herfindahl–Hirschman Index
- Total share entered
- Firms
- Equivalent number of equal-sized firms
- HHI increase from the merger
- Concentration (2023 U.S. guidelines)

## Formula

```
HHI = Σ (market share in %)²
Range: near 0 (perfect competition) to 10,000 (monopoly)
```

## Explanation

Competition authorities use the HHI to judge mergers. Under the 2023 U.S. Merger Guidelines, a market with an HHI above 1,800 is highly concentrated, and a merger that raises the HHI by more than 100 points in such a market is presumed to harm competition.

### How to use the HHI Calculator

- **Market shares of each firm (%)**
- **Merging firm A share (optional)**
- **Merging firm B share (optional)**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter the market shares of the firms in the market, in percent, separated by commas.

### Tips

- Use figures for the same period (a month, a quarter or a year) for every input so ratios compare like with like.
- Track the metric over time – the trend usually tells you more than a single value.
- Compare your result with industry benchmarks, which vary a lot between sectors.
- Treat the result as a starting point for a decision, then check the assumptions behind each input.

### Common mistakes to avoid

- Mixing monthly and yearly numbers in the same calculation.
- Using revenue where the formula needs profit (or the other way round).
- Forgetting hidden costs such as taxes, fees, overheads or your own time.

### Inputs explained

FieldWhat to enterMarket shares of each firm (%)A list of numbers separated by commas, spaces or new linesMerging firm A share (optional)A numberMerging firm B share (optional)A number

### What each result means

- **Herfindahl–Hirschman Index** = dot([Market shares of each firm (%)], [Market shares of each firm (%)])
- **Total share entered** = sum([Market shares of each firm (%)])
- **Firms** = count([Market shares of each firm (%)])
- **Equivalent number of equal-sized firms** = 10000÷[Herfindahl–Hirschman Index]
- **HHI increase from the merger** = 2×[Merging firm A share (optional)]×[Merging firm B share (optional)]

## Worked example

Inputs — Market shares of each firm (%): 30, 25, 20, 15, 10; Merging firm A share (optional): 0; Merging firm B share (optional): 0.

Results — **Herfindahl–Hirschman Index = 2,250**; Total share entered = 100 %; Firms = 5; Equivalent number of equal-sized firms = 4.4; HHI increase from the merger = 0; Concentration (2023 U.S. guidelines) = Highly concentrated.

## FAQ

**What does an HHI of 2,500 mean?**
A highly concentrated market – roughly equivalent to four equal-sized firms.

**How does a merger change the HHI?**
It rises by 2 × share A × share B.

**What are the HHI thresholds?**
The 2023 U.S. guidelines call markets above 1,800 highly concentrated.

**What formula does the HHI Calculator use?**
HHI = Σ (market share in %)².


## Sources

- [U.S. DOJ & FTC – 2023 Merger Guidelines](https://www.justice.gov/atr/2023-merger-guidelines)