Measures of concentration and competition are important and give a
first insight of a given market structure in a particular market. They
are important to determine public policies and strategic corporate
decisions. However, in research and in practice the most commonly used
measure is the Herfindahl Hirschmann Index. The goal of the
`concstats`

package is to offer a set of alternative and/or
additional measures to better determine a given market structure and
therefore reduce uncertainty with respect to a given market situation.
Various functions or groups of functions are available to achieve the
desired goal.

-`concstats`

calculates a set of pre-selected
concentration and diversity measures in a one-step procedure.

-`mstruct`

offers market structure measures, e.g. the sum of
Top3 or Top5 market shares.

-`comp`

is a wrapper for concentration measures, e.g. the
Herfindahl Hirschmann Index.

-`inequ`

offers diversity or inequality measures, e.g. the
Entropy or the Palma ratio.

You can install the development version from GitHub or:

```
install.packages("devtools") # a package for developing R packages
::install_github("schneiderpy/concstats") devtools
```

`concstats`

`concstats`

has one main function which calculates a set of pre-selected measures in a one-step procedure.

`mstruct`

is a wrapper to calculate different structural measures. Within this group are measures like the number of firms, numbers equivalent, cumulative Top 3 and Top 5 market share. The measures might be calculated as a group or individually.

`comp`

is a group wrapper to calculate different concentration measures. Within this group are measures like the Herfindahl-Hirschmann index (HHI), the dual of the HHI, the Dominance or the Stenbacka index.

`inequ`

is a group of inequality and diversity measures, e.g. Entropy, Gini coefficient, Palma ratio.

This is a basic example which shows you how to calculate an individual measure or a set of market structure and concentration measures:

```
library(concstats)
## Create some simple data
<- c(0.4, 0.2, 0.25, 0.1, 0.05, 0, 0)
share1 <- hhi(share1) # the Herfindahl-Hirschmann Index
share_hhi #> [1] 0.275
<- dom(share1) # the Dominance Index
share_dom #> [1] 0.4127273
## Create some other simple data
<- c(0.35, 0.4, 0.05, 0.1, 0.06, 0.04) # market shares of each firm in
share2 # the market (should sum up to 1)
## Calculate a selected set of market structure and concentration measures
<- concstats(share2) # creates share2_con, a selected set of measures
share2_con #> Measures Values
#> 1 Firms 6.00
#> 2 Nrs_equivalent 3.33
#> 3 Top (%) 40.00
#> 4 Top3 (%) 85.00
#> 5 Top5 (%) 96.00
#> 6 HHI 0.30
#> 7 Entropy(RE) 0.79
#> 8 Palma ratio 2.67
```

In this case, the result is a table with eight selected measures: 1) Number of firms, 2) Numbers equivalent of firms, 3) Top firm, share in %, 4) Top 3 firms, share in %, 5) Top 5 firms, share in %, 6) The Herfindahl-Hirschmann Index, in decimal form, 7) Normalized Entropy (RE), a value between 0 and 1, 8) Palma ratio, an inequality score which measures the ratio of the top 10 percent to the bottom 40 percent.

- Chang, E. J., Guerra, S. M., de Souza Penaloza, R. A. & Tabak,
B. M.
- Banking concentration: the Brazilian case. In Financial Stability Report. Brasilia: Banco Central do Brasil, 4: 109-129.

- Cobham, A. and A. Summer (2013). Is It All About the Tails? The Palma Measure of Income Inequality, Center for Global Development, Washington, DC.
- Garcia Alba Idunate, P. (1994). Un Indice de dominancia para el analisis de la estructura de los mercados. El Trimestre Economico, 61: 499-524.
- Ginevicius, R. and S. Cirba (2009). Additive measurement of market concentration, Journal of Business Economics and Management, 10(3), 191-198.
- Palma, J. G. (2006). Globalizing Inequality: ‘Centrifugal’ and ‘Centripetal’ Forces at Work, DESA Working Paper No. 35.
- Shannon, C. E. (1948). A Mathematical Theory of Communication, The Bell System Technical Journal (Nokia Bell Labs).

The hexagon sticker is created by myself with the
`hexsticker`

package. A good overview and a lot of
inspiration (adding badges, how to create a webpage and testing the
package) comes from Cosima
Meyer and Dennis Hammerschmidt.

If you have any questions or find any bugs requiring fixing, feel free to open an issue or pull request.

Contributions are welcome!