Vol 4, No 1. Article 2


Bin Zhou Department of Geography Southern Illinois University Edwardsville Edwardsville, IL 62026 E-mail Bin Zhou


Simulation of the Hirfindahl-Hirschman Index: The Case of the St. Louis Banking Geographical Market.


This paper proposes three types of functional specifications of firm size distribution in an attempt to simulate the Hirfindahl-Hirschman Index or HHI. The three types of specifications are arithmetic progression, linear function, and a group of non-linear specifications in which the firm size is a function of the firm rank. Empirical simulations are conducted for the St. Louis banking market using non-linear specifications and bank data from 1994 and 2002. Simulation results show that relatively higher accuracy is achieved for inverse, power, log and quadratic specifications. Key Words: banking, Hirfindahl-Hirschman Index, simulation.

Read the Paper

Bin Zhou's Paper. Note: The paper will open in a new browser window