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.