Evaluating criticality of strategic metals: Are the Herfindahl–Hirschman Index and usual concentration thresholds still relevant?

Valérie Mignon (), Pauline Bucciarelli and Emmanuel Hache

No 2024-3, EconomiX Working Papers from University of Paris Nanterre, EconomiX

Abstract: This paper aims to evaluate the criticality of strategic metals by (i) investigating the validity of the Herfindahl-Hirschman Index (HHI) for assessing the supply risk aspect of criticality and (ii) determining an appropriate threshold for using this indicator in the context of criticality studies. Relying on a large panel of 33 strategic metals over the 1995-2021 period, our findings show that the variation of HHI has more impact on metal prices at lower HHI levels and question the existence of a threshold that clearly distinguishes high-risk markets from less risky ones based on their concentration levels. Overall, we show that using the HHI as a supply risk indicator, especially in conjunction with a threshold, may result in underestimating risks in less concentrated markets.

Keywords: Strategic metals; Criticality; Herfindahl–Hirschman Index; Metal prices; Panel regression (search for similar items in EconPapers)
JEL-codes: C23 C24 Q02 Q34 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2024
New Economics Papers: this item is included in nep-com
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Evaluating criticality of strategic metals: Are the Herfindahl–Hirschman Index and usual concentration thresholds still relevant? (2025)
Working Paper: Evaluating criticality of strategic metals: Are the Herfindahl–Hirschman Index and usual concentration thresholds still relevant? (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:drm:wpaper:2024-3

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