koncentrationsindex

Konzentrationsindex, or concentration index, is a family of measures used to quantify how a variable is distributed across a population or market. It is applied in diverse fields, notably health economics to study socioeconomic-related inequality in health outcomes and industrial economics to assess market concentration among firms.

In health economics, the concentration index (CI) measures how a health variable is distributed with respect to socioeconomic status. A common form is CI = (2/μ) times the covariance between the health variable y and the fractional rank R of individuals by income, where μ is the mean of y. The index ranges from −1 to 1. A value near zero indicates little or no socioeconomic-related inequality; positive values indicate concentration of the health variable among higher-income groups, while negative values indicate concentration among lower-income groups. The interpretation depends on the health variable’s definition (for example, good health versus ill health).

In market economics, concentration is often summarized by the Herfindahl‑Hirschman Index (HHI) or concentration ratios. The HHI is defined as the sum of squared market shares of all firms in a market (using decimal shares, range 0 to 1; or using percentages, range 0 to 10,000). Higher values signal greater market concentration and less competition. Concentration ratios, such as CR4, sum the market shares of the top four firms and provide a simpler, interpretable snapshot of dominance.

Limitations include sensitivity to population or market boundaries, data quality, and the choice of variables and ranking. CI and HHI capture different aspects of concentration and are not interchangeable. They are related to concepts such as the Lorenz curve and concentration curve in assessing distributional characteristics.

See also: Lorenz curve, concentration curve, Gini coefficient, HHI, concentration ratio.