The CR4 index and the interval estimation of the Herfindahl-Hirschman Index: an empirical comparison

Maurizio Naldi and Marta Flamini ()
Additional contact information
Marta Flamini: Università Telematica Internazionale UNINETTUNO - Università Telematica Internazionale UNINETTUNO - Università Telematica Internazionale UNINETTUNO

Working Papers from HAL

Abstract: Concentration indices are employed to measure the level of competition within an industry. Among the several indices proposed in the literature, the Herfindahl-Hirschman Index (HHI) and the Four-firm concentration ratio (CR4) are among the most established. However, the HHI requires the market shares of all market players to be known, while the CR4 requires just the top four. In order to investigate whether we can always use the CR4 in place of the HHI, we have compared the indices resulting from a selected group of datasets. This preliminary analysis shows that the relationship between the CR4 and the HHI may not be monotonic, so that the CR4 does not preserve the order relationship established through the HHI.

Keywords: Concentration indices; Competition; Herfindahl-Hirschman Index (HHI); Four-firm concentration ratio (search for similar items in EconPapers)
Date: 2014-06-11
New Economics Papers: this item is included in nep-com
Note: View the original document on HAL open archive server: https://hal.science/hal-01008144
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
https://hal.science/hal-01008144/document (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-01008144

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().