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.
Inputs explained
| Field | What to enter |
|---|---|
| Market shares of each firm (%) | A list of numbers separated by commas, spaces or new lines |
| Merging firm A share (optional) | A number |
| Merging 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)]
Formula
HHI = Σ (market share in %)²
Range: near 0 (perfect competition) to 10,000 (monopoly)
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.
Frequently asked questions
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.