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A note on industry concentration measurement, Accessible Data
Figure 1. Change in average top-4 firm share by sector, 1997-2017
Change (percentage points)
| Sector | Mean | Median |
|---|---|---|
| Health care | -5.4 | 4.6 |
| Utilities | -0.5 | -2.7 |
| Accom. & food | 0.4 | -5.5 |
| Other services | 0.8 | 5.5 |
| Manufacturing | 1.5 | 4.7 |
| Educational services | 1.9 | 1.9 |
| Prof, sci., & tech svcs. | 2.1 | 4.3 |
| Arts, ent., & rec. | 2.2 | 4.5 |
| Real estate | 2.6 | 5.5 |
| Admin. & support | 5.9 | 4.6 |
| Information | 8.8 | 7.0 |
| Finance & Ins. | 9.0 | 9.5 |
| Transp & ware. | 11.3 | 13.7 |
| Wholesale trade | 11.7 | 11.2 |
| Retail trade | 18.9 | 22.3 |
Note: Change in sales-weighted mean/median of 6-digit industries, 1997-2017. Concentration is measured as the share of sales accounted for by the top 4 firms.
Source: 1997 and 2017 Economic Censuses.
Figure 2. Correlations of concentration ratios in Compustat versus Economic Censuses
2002, (top left panel)
Correlation
| Measure | 4-digit NAICS | 5-digit NAICS | 6-digit NAICS |
|---|---|---|---|
| Top 4 | 0.09 | 0.12 | 0.13 |
| Top 8 | 0.09 | 0.08 | 0.08 |
| HHI | 0.03 | 0.18 | 0.08 |
2007, (top right panel)
Correlation
| Measure | 4-digit NAICS | 5-digit NAICS | 6-digit NAICS |
|---|---|---|---|
| Top 4 | 0.13 | 0.13 | 0.12 |
| Top 8 | 0.09 | 0.08 | 0.08 |
| HHI | 0.11 | 0.12 | 0.09 |
2012, (bottom left panel)
Correlation
| Measure | 4-digit NAICS | 5-digit NAICS | 6-digit NAICS |
|---|---|---|---|
| Top 4 | 0.14 | 0.12 | 0.14 |
| Top 8 | 0.11 | 0.10 | 0.10 |
| HHI | 0.04 | 0.05 | 0.04 |
2017, (bottom right panel)
Correlation
| Measure | 4-digit NAICS | 5-digit NAICS | 6-digit NAICS |
|---|---|---|---|
| Top 4 | 0.15 | 0.12 | 0.14 |
| Top 8 | 0.10 | 0.11 | 0.10 |
| HHI | -0.07 | -0.06 | -0.01 |
Note: Simple correlations of concentration ratios between Compustat and Economic Census. The key identifies bars in order from left to right.
Source: Compustat, Economic Censuses, and author calculations.
Figure 3. Concentration and price growth in Compustat and Economic Censuses
PPI growth
This is a six-panel figure. Each panel features a scatterplot and regression fit of inudstry-level producer price index (PPI) growth on the vertical axis versus industry concentration on the horizontal axis, and each panel features scatters for both the Economic Census and Compustat. The top row of panels use PPI growth from December 2020 through November 2022; the middle row of panels use PPI growth from December 2020 through December 2021; and the bottom row of panels use PPI growth from December 2021 through November 2022. Within each row, the left panel uses the top-4 firm share measure of concentration, while the right panel uses the top-8 firm share. In each panel, the scatter shows that Economic Census concentration ratios are widely distributed and range from close to zero up to 100, while Compustat concentration ratios have a range that starts much higher and are heavily concentrated at 100. The regression line relating PPI growth and concentration is steeper for Compustat than for the Economic Census in the top two rows of panels (i.e., for the December 2020-November 2022 period and the December 2020-December 2021 period), and much more so in the right panels of those rows (i.e., the top-8 firm shares). The slopes of the lines are more similar in the bottom row (i.e., for the December 2021-November 2022 period).
Note: PPI data are monthly average (log points) of seasonally adjusted index growth. Lines are sales-weighted linear fit among industries present in both data sources. Data are at the 6-digit NAICS level.
Source: BLS, Compustat, Economic Censuses, and author calculations.