A Decomposition of the Herfindahl Index of Concentration

de Gioia, Giacomo (2017): A Decomposition of the Herfindahl Index of Concentration.

Abstract

The Herfindahl index is one of the most known indices used to measure the concentration of a variable distributed over a certain number of units, and tipically to measure the degree of concentration of business in a market. Its worth is the sensitivity both to the dimensional variability of these units and to their numerical consistency. In the this note a decomposition of the H-index into these two terms is offered.

• Item Type: MPRA Paper
• Language: English
• Keywords: Herfindahl; Decomposition of the Herfindahl index; Industrial concentration; Metric index of concentration.
• Subjects: C - Mathematical and Quantitative Methods > C4 - Econometric and Statistical Methods: Special Topics > C43 - Index Numbers and Aggregation; C - Mathematical and Quantitative Methods > C4 - Econometric and Statistical Methods: Special Topics > C49 - Other; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D40 - General; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L11 - Production, Pricing, and Market Structure ; Size Distribution of Firms

References

de Gioia, G. (2000), "Measures of concentration and probability. A decomposition of the Herfindahl index with an application to Italian data", Research report at Master in Economics--Coripe Piemonte, Moncalieri (Turin); unpublished.

Hay, D. A. and Morris, D. J. (1984), Economia industriale. Teoria e verifiche empiriche, Il Mulino, Bologna.

Ricci, F. (1975), Statistica ed elaborazione statistica delle informazioni, Zanichelli, Bologna.

Scognamiglio Pasini, C. (2013), Economia industriale. Economia dei mercati imperfetti, Luiss University Press, Roma.