Concentration in Product Markets

This paper measures concentration in narrowly defined product markets for a broad range of consumer goods and services in the U.S. from 1994 to 2019. We document two main empirical facts. First, concentration levels are high. 44.4% of the markets in our sample are “highly concentrated” as defined by U.S. regulators. Second, market concentration has been decreasing since 1994. The median HHI falls from 2362 to 2045. These findings stand in stark contrast to the prior literature, which uses market definitions that are aggregated to a level that is typically too broad to accurately reflect competition in consumer markets.