Herfindahl-Hirschman Index (HHI) Calculator (Market Concentration)

What this tool does

The HHI squares each firm's market share in percent and adds them up, so big firms count far more than small ones: a monopoly scores 10 000, four equal firms 2 500, and a market of many tiny firms nearly 0. Dividing 10 000 by the HHI gives the equivalent number of equal-sized firms. Two firms with shares a and b that merge raise the HHI by 2ab, the number competition authorities look at first. Their thresholds for 'concentrated' differ between authorities and have been revised over time — US guidelines used 2 500 in 2010 and 1 800 in 2023 — so check the current guidance. Firms not listed are treated as too small to matter.

Formula

HHI = Σ (market share in %)² · merger rise = 2 × share₁ × share₂ · equivalent firms = 10 000 ÷ HHI

Variables

Worked example

Limitations

• The default values are typical reference figures, not measurements of your situation. Replace them with your own data whenever you have it.
• The result is an estimate based only on the values you type. Real situations often include factors this calculator does not know about.