Author
Bin Zhou
   Department of Geography  
   Southern Illinois University Edwardsville
   Edwardsville, IL 62026  

   E-mail Bin Zhou

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

Abstract
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.

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