Question

What is a shortcoming of the HHI measure?

What is a shortcoming of the HHI measure?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The problem with the HHI index is that it treats all the firms similarly. For example, it does not take into account the credit quality of the borrowers. Both firms whether healthy and not are considered equal on the basis of the size which may not give a true picture. The HHI index may give misleading results as the high concentration ratio does not imply that there is no competition or the firms making high concentration are better than the rest. High concentration domestically does not always imply competitive or burgeoning global competitive.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Does either the four-firm concentration ratio or the HHI directly measure the amount of competition in...
Does either the four-firm concentration ratio or the HHI directly measure the amount of competition in an industry? Why or why not?
Write a convincing argument that the Herfindahl-Hirschman Index (HHI) is a “reasonable” or “good” measure of...
Write a convincing argument that the Herfindahl-Hirschman Index (HHI) is a “reasonable” or “good” measure of inequality of the distribution of resources (be they wins, championships, gate revenues, player salaries, etc.) To make your argument, you can use little numerical examples, or you can discuss the algebraic or geometric properties and behavior of HHI. Why does an increase in the sum of squared resource shares indicate an increase in inequality?
Write me a convincing argument that the Herfindahl-Hirschman Index (HHI) is a “reasonable” or “good” measure...
Write me a convincing argument that the Herfindahl-Hirschman Index (HHI) is a “reasonable” or “good” measure of inequality of the distribution of resources. To make your argument, you can use little numerical examples, or you can discuss the algebraic or geometric properties and behavior of HHI. Why does an increase in the sum of squared resource shares indicate an increase in inequality?
What significant shortcoming does the Bragg formulation of X-ray diffraction have?
What significant shortcoming does the Bragg formulation of X-ray diffraction have?
What is the shortcoming of measuring stress by asking about events and circumstances of someone's life?...
What is the shortcoming of measuring stress by asking about events and circumstances of someone's life? What are disadvantages of measuring stress by asking people how they feel?
Calculate the Herfindahl-Hirschman Index (HHI) for each of the following markets. Market A has two firms,...
Calculate the Herfindahl-Hirschman Index (HHI) for each of the following markets. Market A has two firms, each with a market share of 50 percent. The HHI of these two firms is _______ Market B has two firms, one with a market share of 90 percent and the other with a market share of 10 percent. The HHI of these two firms is _______ Market C has firms, 5 with a market share of 16 percent each and 5 with a...
In the HHI, a merger between two small firms can have significant effects if the market...
In the HHI, a merger between two small firms can have significant effects if the market is mischaracterized. Could you please describe what is market mischaracterized and why this statement is correct?
According to Brunori, a shortcoming of most state income tax sytems is that they are indexed...
According to Brunori, a shortcoming of most state income tax sytems is that they are indexed for inflation difficult to administer not easily accepted by the public most states have not been willing to adopt it none of the above According to Brunori, a shortcoming of many state corporate income tax systems is that: they are indexed for inflation difficult to administer not easily accepted by the public most states have not been willing to adopt it none of the...
33.      A shortcoming of return on investment (ROI) is that it may notlead managers to accept good...
33.      A shortcoming of return on investment (ROI) is that it may notlead managers to accept good investment opportunities if a. ROI of the investment is higher than the present ROI of the division. b. the ROI of the investment is the same as the present ROI of the division. c. the ROI of the investment is lower than the present ROI of the division. d. None of the answers is correct. Framing Division The Framing Division had the following data:...
Harrison? Holdings, Inc.? (HHI) is publicly? traded, with a current share price of $ 34 per...
Harrison? Holdings, Inc.? (HHI) is publicly? traded, with a current share price of $ 34 per share. HHI has 21 million shares? outstanding, as well as $ 60 million in debt. The founder of? HHI, Harry? Harrison, made his fortune in the fast food business. He sold off part of his fast food? empire, and purchased a professional hockey team.? HHI's only assets are the hockey? team, together with 50 % of the outstanding shares of? Harry's Hotdogs restaurant chain.?...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT