Talk:Herfindahl–Hirschman index

message: I don't know what standard practice in economics is. In math/physics expressing the s\sub{i}'s in the interval [0,1] would yield an in index in that interval i.e. it would already be normalized. If you express the s_i's in percent, as noted above, monopoly = 10,000. Wouldn't that be the unnormalized HI? Then dividing by 10000 would yield the normalized HI?
Then again, I'm just a failed physicist. If normalization goes wrong, I just renormalize :)
BTW I did google the net to no avail. I emailed the one hit I was allowed to see for free :)
-r
The non-normalized version is by far the more widely used, at least traditionally. -M
So, the question remains. Since the non-normalized version (o to 10,000) is the most-commonly-used, why on Earth is Wikipedia defaulting to the normalized version? If nothing else, it's just confusing. On top of that, it requires all of the research on HHI, and the antitrust-related work from the Department of Justice, to be normalized before it can be posted onto Wikipedia, causing excess work in order to keep Wikipedia consistent with itself. Can we just change it all to non-normalized, and include the option to normalization as a note? Ben (talk) 21:02, 5 May 2012 (UTC)
thread_title:  Normalized vs. Non-normalized. 

message: Why is the L2 norm (squaring each s_i, ²) considered sufficient "stretching" of the importance of concentrated market share?  For example you would get even more weight attributed to having a few big firms by cubing ³ the data and less weight attributed to having a few big firms by putting the data to the one-and-a-half power.  Why is 2 the right number?
Perhaps there is a proof showing that squaring the data has some nice property.  Is this the case?
Also is there any way to test the goodness of this index?  E.g., are here correlations between decreasing HHI and decreasing price over time in various markets?  Is there a way to test if the index is inappropriate because certain market players fill qualitative niches or for another reason "should" be distributed as e.g. 10-10-80?
Crasshopper 16:43, 18 May 2006 (UTC)
replies: text: If I have to speculate, there is no "right" power. Different markets will have a different minimum number of firms that guarantees perfect-competition-like behavior. It would probably make sense to come up with a general HHI metric, which gives the power as a parameter. Then different markets could have different values for the parameter derived from some price elasticity standard, or simply experts' consensus.
Anyway, American regulators have decided to allow different HHIs for different markets and that seems to be sufficient for practical purposes so far. --Cryout 18:50, 10 August 2007 (UTC)
thread_title:  squared ²  / L_2 norm 

message: (I am usually posting on wikipedia NL, but this remark seemed more appropriate with an American audience.) This article is missing a reference to the scientists Herfindahl and Hirschman (Hirschmann ?), either in the form of an internal wikipedia link or bibliographically near the bottom.--158.169.131.14 08:18, 12 September 2007 (UTC)
thread_title:  Origin of the name 

message: where is come form those tresholds?
(1000, 1800 , ...)
why 1000?  —Preceding unsigned comment added by 80.191.12.33 (talk) 04:54, 20 August 2008 (UTC)
thread_title:  Tresholds 

message: Sorry, but shouldn't the math formulas in the examples-as-stated actually be:
Case 1: Herfindahl index = 6 * 152 + 10 * 12 = 1360 
Case 2: Herfindahl index = 1 * 802 + 5 * 22 + 10 * 12 = 6430 
Jimad (talk) 19:48, 22 March 2009 (UTC)
thread_title:  Math Errors in the Examples? 

message: There is a variation on the Herfindahl index that is commonly used in political economy analysis of ethnic/linguistic/religious fractionalization in societies (in fact, the Herfindahl ethnic linguistic fractionalization index, or ELF, is considered the most important measure of ethnic fractionalization in the field today).
The computation is similar, substituting ethnic groups for firms, and (attempting) to include all ethnic groups (instead of the 50 largest, as with the firm calculation).  To turn this into an index, the sum is subtracted from 1.
My question: does this warrant a separate wikipedia page (and a disambiguation page), since the subject matter is different, or a simply a new section on this page, since it is essentially the same formula?
Zjfstout (talk) 00:04, 10 February 2009 (UTC)
thread_title:  Herfindahl index of Fractionalization - disambiguation page needed? 

message: Why only use the 50 largest numbers in the definition? This only relates to a practical implementation of the index, as opposed to its definition (because using the 50 largest is simpler and this does not make a big difference to the final number). Lachambre (talk) 14:34, 17 April 2009 (UTC)
thread_title:  Threshold