The hhi Package: Streamlined Calculation and Visualization of Herfindahl-Hirschman Index Scores

Abstract

Concentration and competition are key aspects of many fields, from economics and busieness to political and social sciences. One of the most common measures of concetration is the Herfindahl-Hirschman Index (Herfindahl, 1950) (Hirschman, 1945). The measure, which is often used as a measure of competition among actors in a finite space, is calculated as the sum of squared shares of the market retained by individual firms or actors (Rhoades, 1993). A score of 0 means perfect competition, and a score of 10,000 means a perfect monopoly, where the market is dominated by a single firm or actor. Despite the Index’s frequent use, though, to date there has been no R package solely dedicated to calculation and visualization of this common metric.