Clonal Hematopoiesis (CH) is a common, age-related phenomenon of growing scientific interest, due to its association with hematologic malignancy, cardiovascular disease and decreased overall survival. CH is commonly attributed to the preferential outgrowth of a mutant hematopoietic stem cell (HSC) with enhanced fitness, resulting in clonal imbalance. In-depth understanding of the relation between HSC clonal dynamics, CH and hematologic malignancy requires integration of fundamental lineage tracing studies with clinical data. However, this is hampered by lack of a uniform definition of CH and by inconsistency in the analytical methods used for its quantification. Here, we propose a conceptual and analytical framework for the definition and measurement of CH. First, we transformed the conceptual definition of CH into the CH index, which provides a quantitative measure of clone numbers and sizes. Next, we generated a set of synthetic data, based on the beta-distribution, to simulate clonal populations with different degrees of imbalance. Using these clonal distributions and the CH index as a reference, we tested several established indices of clonal diversity and (in-)equality for their ability to detect and quantify CH. We found that the CH index was distinct from any of the other tested indices. Nonetheless, the diversity indices (Shannon, Simpson) more closely resembled the CH index than the inequality indices (Gini, Pielou). Notably, whereas the inequality indices mainly responded to changes in clone sizes, the CH index and the tested diversity indices also responded to changes in the number of clones in a sample. Accordingly, these simulations indicate that CH can result not only by skewing clonal abundancies, but also by variation in their overall numbers. Altogether, our model-based approach illustrates how a formalized definition and quantification of CH can provide insights into its pathogenesis. In the future, use of the CH index or Shannon index to quantify clonal diversity in fundamental as well as clinical clone-tracing studies will promote cross-disciplinary discussion and progress in the field.