Title: Revisiting Kelly's version of the Herfindahl-Hirschman index

Authors: George G. Djolov

Addresses: University of Stellenbosch Business School, and Methodology and Evaluation Directorate, Statistics South Africa, Private Bag X44, Pretoria 0001, South Africa

Abstract: This communication looks at Kelly's proposed formulation of the Herfindahl-Hirschman index (HHI), which has received some attention in the economic and management fields as a promising method to improve the measurement of market concentration by supposedly taking the skewness of market shares into account in the course of the index's computation. It is found that this is not the case, and suggestions are made as to how the formulation could be aligned to its intended aim as originally proposed.

Keywords: HHI; Herfindahl-Hirschman index; relative variability.

DOI: 10.1504/IJCEE.2018.091039

International Journal of Computational Economics and Econometrics, 2018 Vol.8 No.2, pp.170 - 182

Received: 02 Oct 2015
Accepted: 27 Apr 2016

Published online: 23 Feb 2018 *

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