Herfindahl–Hirschman Index

The Herfindahl–Hirschman Index (or HHI) is like a measurement tool to help figure out how concentrated certain things are. For example, it could measure how concentrated a market is. This means if just a few companies in a market control a lot of it, then that market is said to be very "concentrated", and would likely have a high HHI score. The HHI looks at the market share of each company in a market (how much it controls). A low score means the market is more spread out between different companies, whereas a high score means it's concentrated (just a few companies control the market). We use the HHI to help make sure that a market isn't too concentrated, since it's not good for customers if a few companies control most of the market.