Search
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

# Concentration Indices - Research Paper Example

Summary
Concentration indices are useful ways to analyze scenarios which deal with quantitative analysis of the specific subjects be it economic market concentration or health equality analysis. Any concentration index is defined with respect to its concentration curve which usually is two dimensional curve having two coordinates of (x, y) as its main parameters…

## Extract of sampleConcentration Indices

This index also shows the amount of competition present among the companies. Basically it takes market shares in account and calculates the sum of shares of the market shares of all the companies present in that particular industry. So if there are N firms in an industry, the HHI is calculated as
Where s is the market share of the firm and 'n' represents the number of the firms in the whole industry. If we see a decrease in HHI index we can say that there is an increase in competition and there has been a loss of pricing power and it's vice versa when there is an increase in the value. Other significant variants which typically revolve around the value of HHI are unconcentrated index which is indicated when H index is below 1000. HHI index between 1000 and 1800 indicates moderate concentration value and HHI index above 1800 indicates high concentration
Concentration Ration is defined as the percentage of market share which is owned by N largest firms in an industry. Usually the value of N is 4 but sometimes some other larger number is taken. It is expressed as CRn, so a concentration ration for N largest firms in an industry is defined as follows
Where s defines the market share of the firm and n defines the number of the large firms if the value of the index is near zero then we can say that the industry is extremely competitive. However as general thumb rule followed by the industry analysts, that if CR value is lower then 40 then it implies that the industry has very stiff competition among the firms present in them and that none of them have a major chunk of market share in them. While on the other scenario where the value is close to 95 then we can say that one firm which is dominating the whole scenario. It can be called a monopolistic scenario.
Lerner Index:
This index value considers the market positioning of the firm. It talks about the pricing and measures the extent to which a given firm's prices exceed marginal costs. Basically it is measured as the difference between the price and the marginal cost of the goods and it is defined as

One thing we need to understand is that a high index value does not indicate the firm's exercising market power. Prices may exceed marginal costs
Gini Coefficient:
One of the most famous indexes is the gini coefficient; it is termed as a measure of inequality of a distribution. It is defined as the ratio of areas on the Lorenz curve If the area between the line of perfect equality and Lorenz curve is M, and the area under the Lorenz curve is N, then we can say that the Gini coefficient is M/(M+N). we can say that this index is used as health inequality or finance related inequality metrics. It is termed between 0 and 1 where if it becomes 0 it is termed as perfect income or health equality. And 1 related to perfect inequality. A practical value usually lies in between them.
Costs and Benefits of the Indices
There are benefits and advantages of some of the indices and some issues with others. If we look at HHI index we can say that it is a costly proposition. It considers all the firms in one single industry and if suppose the industry has 10000 firms under its belt then taking the considerations of 10000 ... Read More
Cite this document
• APA
• MLA
• CHICAGO
(“Concentration Indices Research Paper Example | Topics and Well Written Essays - 1250 words”, n.d.)
(Concentration Indices Research Paper Example | Topics and Well Written Essays - 1250 Words)
https://studentshare.net/miscellaneous/309220-concentration-indices.
“Concentration Indices Research Paper Example | Topics and Well Written Essays - 1250 Words”, n.d. https://studentshare.net/miscellaneous/309220-concentration-indices.
Click to create a comment
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
The Relevance of Employee Engagement Indices as A Performance
The organizational aims and objectives, the similar practices of competitors and the conditions in the internal and external organizational environment seem to influence the use of engagement indices as a measure of performance. The literature developed in this field has been reviewed for checking the potentials of engagement indices to play such role.
4 Pages(1000 words)Research Paper
Health Insurance Concentration and its Consequences
One of the major causes for the rise in insurance cost includes the health care concentration. This not only affects the cost of insurance, but also affects the effectiveness and admittance to health care in the country. How/ where do Americans get health insurance?
8 Pages(2000 words)Research Paper
New Cardiac Marker
However, with rare exceptions, many of these novel biomarkers showing great potentiality with regard to cardiovascular applications still have a long way to travel before being confirmed as clinically applicable.As a matter of fact, among the plethora of new biomarkers known to posse’s potential value for application in cardiovascular diseases states in the past years, most have been termed as being “not ready for prime time.” This has been linked to complexities that include: defective methods for their measurement and ambiguity about their real value to the clinician (Shah etal.pp1538-1549).
10 Pages(2500 words)Research Paper
Statistical Analysis of Stock Indices
Furthermore, the regression analysis especially the autoregressive model that is of interest in this case has successfully been used during the development of a series of robust tests of the 'intrinsic value measure, along with other traditional measures of value, for the Australian Stock Market'.
12 Pages(3000 words)Research Paper
Investors like to minimize the risk in their investments and make maximum gain at the same time. Efficient market hypothesis suggests that the current price of stock market reflects all
15 Pages(3750 words)Research Paper
Teeens in concentration camps
These teenagers have suffered different problems and they were alienated from their families and other relatives. During that time teenagers stay aliened years of tiring
5 Pages(1250 words)Research Paper
What evidence is there of anti-Japanese racism prior to the US government's decision to place all persons of Japanese ancestry in concentration camps and evidence that this anti-Japanese racism played an important part in the decision
This was also done to other Japanese who could not have become the American citizens at that time due to various reasons. Using war as the scope goat, President Franklin D. Roosevelt made sure
9 Pages(2250 words)Research Paper
Testing Chloride Concentration in South Florida Canal
The author of the text casts light upon one of the environmental problems - the water condition in South Florida Canal. According to the text, combined effects of agriculture and urban activities have had a significant impact on the waters of the South Florida Canal for a period of over 100 years.
5 Pages(1250 words)Research Paper
Filtration as a sample concentration method of water samples
Water is an essential constituent of life. In fact, human beings cannot do without water. Water is a biological, physical, and chemical component that bears a huge influence on life as it is known on Earth. Hence, researchers from diverse fields have sought to come up with ways to manipulate water in order to achieve certain aims that are beneficial to life.
5 Pages(1250 words)Research Paper
Let us find you another Research Paper on topic Concentration Indices for FREE!
+16312120006