Since the early 1980s the U.S. Justice Department has measured industry concentration with the Herfindahl-Hirschman Index (HHI) (or sometimes Hirschman-Herfindahl). The HHI is the sum of the squares of the market shares of the firms in the industry. Some examples of computing the HHI follow:

For an industry of 3 firms with market shares of 60%, 30% and 10%:
HHI = 60² + 30² + 10² = 4600
For an industry of 4 firms with market shares of 40%, 30%, 20%, and 10%:
HHI = 40² + 30² + 20² + 10² = 3000
For an industry of 4 firms, each with 25% market share:
HHI = 25² + 25² + 25² + 25² = 2500

Industries with HHIs below 1000 are considered to be unconcentrated, while those with HHIs above 1800 are considered concentrated.