HHI Calculator (Herfindahl-Hirschman Index Calculator)
Results are estimates based on the values you enter. Recheck your inputs and assumptions before using the output for decisions.
Calculate the Herfindahl-Hirschman Index from market-share percentages to estimate market concentration.
HHI Calculator (Herfindahl-Hirschman Index Calculator)
Free online HHI calculator to measure market concentration from the market shares of competing firms. This calculator is useful for economists, competition analysts, investors, consultants, policy researchers, students, and business strategists who want a quick way to estimate how concentrated a market is. HHI stands for Herfindahl-Hirschman Index, and it is one of the most common measures used to evaluate whether a market is highly competitive, moderately concentrated, or highly concentrated.
This page uses market-share percentages for up to five firms or competitive groups. It then squares each share and adds them together to produce the HHI score. The calculator also shows the total market share entered, the largest market share, and the equivalent number of equal-sized firms implied by the HHI. That extra context makes the score easier to interpret. If the total market share entered is close to 100%, the result is a fuller market-level estimate. If it is much lower than 100%, the result only reflects the portion of the market you entered.
The formula of HHI
HHI = s1² + s2² + s3² + s4² + s5²
Total market share entered = s1 + s2 + s3 + s4 + s5
Largest market share = Maximum of all entered shares
Equivalent equal-sized firms = 10000 / HHI
Here s1, s2, s3, s4, and s5 are the market shares of the entered firms expressed as percentages, not decimals. Because the shares are entered as percentages, the HHI score ranges from near 0 up to 10,000. A monopoly with 100% market share has an HHI of 10,000 because 100² = 10,000.
Solved Example
Example 1: Find the HHI if five firms have market shares of 35%, 25%, 20%, 12%, and 8%.
Solve: HHI = 35² + 25² + 20² + 12² + 8²
HHI = 1225 + 625 + 400 + 144 + 64 = 2458
Total market share entered = 35 + 25 + 20 + 12 + 8 = 100%
Largest market share = 35%
Equivalent equal-sized firms = 10000 / 2458 = 4.07
Example 2: Find the result if market shares are 45%, 20%, 15%, 10%, and 10%.
Solve: HHI = 45² + 20² + 15² + 10² + 10²
HHI = 2025 + 400 + 225 + 100 + 100 = 2850
Total market share entered = 100%
Largest market share = 45%
Equivalent equal-sized firms = 10000 / 2850 = 3.51
Example 3: Find the result if market shares are 20%, 20%, 20%, 20%, and 20%.
Solve: HHI = 20² + 20² + 20² + 20² + 20²
HHI = 400 + 400 + 400 + 400 + 400 = 2000
Total market share entered = 100%
Largest market share = 20%
Equivalent equal-sized firms = 10000 / 2000 = 5.00
Table of HHI calculator
| Share Set | Total Share | HHI | Largest Share | Equivalent Firms |
|---|---|---|---|---|
| 35, 25, 20, 12, 8 | 100% | 2458 | 35% | 4.07 |
| 45, 20, 15, 10, 10 | 100% | 2850 | 45% | 3.51 |
| 20, 20, 20, 20, 20 | 100% | 2000 | 20% | 5.00 |
| 60, 15, 10, 10, 5 | 100% | 4050 | 60% | 2.47 |
How to use this HHI calculator
Enter the market share percentages of the firms or competitive groups in the proper input fields. Use percentages, not decimals, so enter 25 for 25% instead of 0.25. Try to make the entered shares add up to about 100% if you want a full-market estimate. Then click the calculate button. The calculator will show the HHI score, total market share entered, largest market share, and the equivalent number of equal-sized firms in the result box.
This calculator is useful for comparing industries, reviewing merger scenarios, studying market power, and understanding how concentrated a sector may be. In general, a lower HHI suggests a more competitive market with smaller firms, while a higher HHI suggests more concentration. A market with one dominant player and several small competitors usually produces a much higher HHI than a market where shares are distributed more evenly across firms.
When using the result, remember that HHI is a structural concentration measure, not a complete picture of competition. Markets with similar HHI values can still behave differently because of pricing power, regulation, barriers to entry, product differentiation, and switching costs. Even so, HHI remains a very useful quick metric for competition analysis. This calculator gives a clear numerical view that supports market research, strategy work, investment screening, and educational analysis.