• The Herfindahl-Hirschmann Index (HHI) is used to determine market competitiveness.
  • A market with an HHI of less than 1500 is considered a competitive market, an HHI between 1500 and 2500 is moderately concentrated, and an HHI of 2500 or higher is highly concentrated.
  • The main disadvantage of HHI is that it is such a simple measure that it does not take into account the complexity of different markets.