Measurement of diversification between asset classes in the Survey of Consumer Finances

- New measures of asset class diversification within the SCF are proposed.
- Measures incorporate the number and concentration of asset classes held.
- Testing illustrates improved interpretations associated with these measures.
- These measures provide a better understanding of household investment decisions.

Using the 2010 and 2013 Survey of Consumer Finances, we propose two new measures of asset class diversification that account for two main dimensions; the number of asset classes held and the degree of concentration of wealth in each asset class.