A key challenge in software product line engineering is to represent solution space variability in an economic, yet easily understandable fashion. We introduce the notion of hierarchical variability models to describe families of products in a manner that facilitates their modular design and analysis. In this model, a family is represented by a common set of artifacts and a set of variation points with associated variants. A variant is again a hierarchical variability model, leading to a hierarchical structure. These models, however, are not unique with respect to the families they define. We therefore propose a quantitative measure on hierarchical variability models that expresses the degree to which a variability model captures commonality and variability in a family. Further, by imposing well-formedness constraints, we identify a class of variability models that, by construction, have maximal measure and are unique for the families they define. For this class of simple families, we provide a procedure that reconstructs their hierarchical variability model. The reconstructed model can be used to drive various static analyses by divide-and-conquer reasoning. Hierarchical variability models strike a balance between the formalism's expressiveness and the desirable property of model uniqueness. We illustrate the approach by a small product line of Java classes.